DAILY INSURER

WE'RE CHANGING OUR NAME.......

2009-12-22T15:47:00.000-08:00

With a new year just around the horizon...we're taking on a new look and name. Look for our newest project - www.fraudinsurance.org

The goal behind the site is to inform insurance industry agents, companies and more of the fraud going on against and within the industry.

Hopefully you will find the site informative and worthwhile. We certainly want your feedback too!

Thanks for reading.....

We'll Be Back.......

2009-09-08T19:46:00.000-07:00

Daily Insurer is undergoing some maintenance and will return. Thanks for reading.

WESTERN NEWS ZONE......

2009-09-03T20:49:00.000-07:00

California Insurance Commissioner Steve Poizner has issued final pay-as-you-drive regulations, which will enable insurers to offer consumers another auto insurance option, allowing rates to be based on actual miles driven as opposed to estimated miles driven. Commissioner Poizner originally proposed pay-as-you-drive regulations in September 2008.

The pay-as-you-drive program will enable insurers to offer a new option for consumers who choose to take advantage of it. Companies can continue to offer traditional insurance based on estimated mileage. However, as soon as regulations go into effect, they can also offer a verified mileage program instead of, or in addition to, a traditional estimated mileage program.

Poizner originally proposed the pay-as-you-drive regulations last summer to make a new, more mileage-accurate auto insurance option available for California consumers. The regulations were last revised in August 2009. Revisions made to the regulations in August are reflected in the final regulations.

The regulations also allow insurers to offer discounts to drivers who opt to purchase a mileage verification policy. Any auto insurance program, including a pay-as-you-drive program, must be approved by Poizner before being placed on the market for consumers to purchase.

If a driver elects to purchase a pay-as-you-drive policy, the insurer would verify the driver's miles through a variety of methods, including odometer readings taken by the insurer or its agents or vendors, auto repair dealers, smog check stations, self-reporting by the policyholder or a technological device placed in the consumer's vehicle. The final regulations explicitly prohibit insurers from gathering location data from consumers for automobile rating purposes through the addition of a technological device. The regulations would not affect existing multipurpose devices such as GM's Onstar system or the use of a technological device as part of an emergency roadside assistance program.

The final regulations incorporate changes based on feedback from consumer groups, the insurance industry and other interested parties. The primary changes from the initially proposed regulations to the final, submitted regulations include:

Language that encourages insurers to offer a price per mile, or prepaid mile option for drivers.
An allowance for insurers to apply to sell mileage verification policies in addition to mileage estimation policies; or they may apply to sell mileage verification policies only.
Language that requires an insurer that offers a pay-as-you-drive plan to specify when filing with the department the exact types of mileage verification the insurer will accept.
The final regulations explicitly require insurers to offer and make available all mileage verification methods equally, to all applicants and insured drivers with a mileage verification policy.
The use of location data is still prohibited for most purposes. The final regulations make it clear that they do not prohibit insurers and motor clubs from offering optional devices to drivers to identify the location of the vehicle for the purpose of an emergency road service, theft service, map service or travel assistance service.

Last August, the Environmental Defense Fund estimated that if 30% of Californians participate in pay-as-you-drive coverage, California could avoid 55 million tons of CO2 emissions between 2009 and 2020, which is the equivalent of taking 10 million cars off the road. This would save 5.5 billion gallons of gasoline and save Californians $40 billion dollars in car-related expenses. Additionally, the California Air Resources Board has recommended the adoption of pay-as-you-drive as one of the means to meet future climate change gas reduction targets.

The final regulations will go into effect pending approval by the Office of Administrative Law, which has 30 days to approve the regulations. As soon as regulations are in effect, which could be as soon as October 2009, insurance companies may apply to offer pay-as-you-drive plans. Pending the Commissioner's approval of a pay-as-you-drive insurance plan submitted to the Department, consumers will be able to purchase a pay-as-you-drive policy.

EASTERN NEWS ZONE......

2009-09-03T20:46:00.000-07:00

The owner of a Hauppauge, New York contracting company was arrested Aug. 27 for lying about the number of people who worked for him so he could lower the cost of his company’s workers’ compensation insurance, the New York State Insurance Department reported.

The office of Suffolk County District Attorney Thomas Spota arrested John Rusnak, 48, of Syosset for workers’ comp fraud. Rusnak is the owner of Colt Contracting Corp.

Francis Hunt, an investigator with the Insurance Department’s Frauds Bureau, said Rusnak is accused of defrauding the state Insurance Fund of $104,000 in lost workers’ comp premiums by concealing the payroll of eight workers.

Rusnak could be sentenced to up to four years in prison if he is convicted. A hearing will be held in Suffolk County Court.

MIDWEST NEWS ZONE......

2009-09-03T20:44:00.000-07:00

Ohio Department of Insurance Director Mary Jo Hudson announced that a Franklin County Grand Jury indicted Luther Watts, Lysandrous Mullins, Jr., and Patricia Irene Mullins on eight counts of insurance fraud each. Watts and Mullins, Jr. are residents of Columbus whileMullins resides in Harts, West Virginia.

In May 2006, the Ohio Department of Insurance, the Delaware County Sheriff’s Office, the West Virginia State Police and the West Virginia Office of the Insurance Commissioner began investigating the three individuals as they had filed a significant number of insurance claims. Claims filed included acts of arson, theft, auto accidents and disability / personal injury claims.

The investigation revealed the three suspects would purchase vehicles from local car dealerships using fraudulent documents and employment information, and would take out credit disability insurance. Shortly after obtaining vehicles, the suspects would then contact the insurance carrier and report they were injured and/or disabled. In order to maximize the length of time the insurance company would have to pay on the vehicle, the suspects would alter disability forms obtained from their provider and submit them to the insurance carriers.

The three individuals are scheduled to be arraigned on Sept. 9.

INTERNATIONAL NEWS ZONE......

2009-09-03T20:39:00.000-07:00

As Hurricane Jimena made landfall in Mexico, signaling the advent of hurricane season, a new analysis of property insurance trends sheds light on the effects of regulation in the aftermath of natural disasters.

In "Catastrophes and Performance in Property Insurance," a policy report from the Independent Institute, economists Patricia Born and Barbara Klimaszewski-Blettner reveal that post-disaster property insurance regulation actually drives up the prices it purports to control. Drawing data from the National Association of Insurance Commissioners, and the Swiss Re Sigma reports, the scholars argue that strict regulatory environments induce higher losses from unexpected catastrophes, as firms are unable to adjust prices in light of changing conditions. Notably, commercial insurers experience less loss following catastrophes than the homeowners insurance market due to greater flexibility and fewer constraints.

The authors demonstrate that in states such as Florida, regulations that include premium limitations or exit restrictions can cause severe market distortions that may result in "an inadequate supply of insurance coverage." When restrictions on premium adjustments are enforced, insurers "may choose to exit the market if rates are not adequate to maintain solvency. This, in turn, prompts regulators to impose exit restrictions or cancellation bans." Addressing wide variations in state-level regulation, Born and Klimaszewski-Blettner dissect the phenomenon of "regulatory chain reactions," in which one intervention seems to establish the "necessity" for more government action. This snowball effect actually exposes taxpayers and consumers to greater risk when disaster hits.

Considering the staggering losses by insurers in 2005 -- $45 billion for Hurricane Katrina alone -- the authors propose several reform measures to protect both insurers and policyholders. They propose deregulating prices and a reform of residual market solutions "with emphasis on allowing market forces to operate more freely in responding to the insurance needs." In considering low-income people in affected areas who are unable to move or afford coverage, they suggest that even direct state subsidization of premiums is preferable (but hardly ideal) to keeping premiums artificially low, while cautioning that "incentive-incompatible subsidization of premiums -- for example, for new buildings in high risk areas" -- must be avoided.

According to empirical analysis, "the natural disasters of 2005 cannot be seen as unusual outliers, but reflect the continuing trend" of increasingly frequent and severe natural disasters. Given this trend, the conclusions and recommendations in "Catastrophes and Performance in Property Insurance" arrive at just the right time.

NATIONAL NEWS ZONE......

2009-09-02T20:05:00.000-07:00

A study of agent compensation and management practices for property/casualty insurance companies is being conducted by Ward Group.

The results of the survey will provide information regarding agency compensation practices, commission structures, incentive awards, travel and other data related to agent management practices. This insurance company survey is free of charge to Ward Group clients and a summary of results will be made available to all participating individuals. Companies may also contact Ward Group to see if they are eligible for discounted or waived participation fees through membership with Ward alliance organizations.

This study will be conducted from Sept. 1 – Oct. 15, 2009 and results will be distributed by December 1, 2009. Participants are invited to attend a webinar presentation on the study’s findings conducted by Ward Group in December.

To participate or to request more information on the survey, contact Vince Albers at valbers@wardinc.com.

A recent analysis of the latest government data by the American Insurance Association (AIA) shows that auto and traffic safety efforts over the past 40 years have significantly reduced the number of accident-related injuries and fatalities.
Recently released federal highway data shows a continuing drop in motor vehicle fatality rates over the 40-year period from 1968 to 2008, as well as a decline in the motor vehicle traffic injury rate despite an increase in vehicle miles traveled.
For example, Americans drove close to one trillion miles in 1968, compared to nearly 3 trillion in 2008. Over those four decades, the motor vehicle traffic fatality rate dropped from 5.19 deaths per-100 million vehicles miles traveled in 1968 to a record-low 1.27 deaths per-100 million vehicle miles traveled in 2008. Additionally, over the past 20 years the injury rate has dropped from 169 injuries per-100 million vehicle miles traveled in 1988 to 80 injuries per-100 million vehicle miles traveled in 2008. By examining the underlying rates rather than simply looking at the total number of deaths and injuries, these statistics take into account any fluctuations in vehicle miles traveled and show that improved safety measures are the leading cause for the pronounced reduction in fatalities and injuries.
AIA’s analysis goes a step further to highlight how the safety-promoting efforts of the insurance industry and other groups have made a critical difference. By looking at the current year vehicle miles traveled and using the fatality rate of historical years, AIA has estimated the amount of people that would have been killed or injured had there been no improvements at all in vehicle and traffic safety. Even with these positive trends, drivers should always drive defensively.
A copy of AIA’s analysis can be found at: http://www.aiadc.org/AIAdotNET/docHandler.aspx?DocID=327085

WESTERN NEWS ZONE......

2009-09-02T20:01:00.000-07:00

State Compensation Insurance Fund announced that it will extend credit to policyholders who have suffered a financial loss or business disruption caused by several wildfires that are ravaging parts of Northern and Southern California. State Fund has more than 100,000 policyholders in the areas.

The fires are spread from as far north as Siskiyou County to Riverside County in Southern California.

By Tuesday, there were seven major fires across the state. The devastation was more severe in the Station Fire which so far has destroyed 18 residences and consumed 121,762 acres in Los Angeles County. Another fire which ravaged 63 homes and businesses near Auburn, was 80 percent contained by Tuesday afternoon.

During a press conference on Tuesday at a command center in Southern California, Gov. Arnold Schwarzenegger declared a state of emergency in San Bernardino County in the wake of two major fires that have led to the evacuation of Oak Glen as well as hundreds of other evacuations in nearby Yucaipa.

State Fund will work with policyholders in the devastated areas who are unable to report payroll figures or submit payments as a result of the emergency.

State Fund has set up dedicated customer service lines to provide assistance to Southern California policyholders whose operations were impacted. Policyholders are encouraged to contact State Fund's Customer Service Center at (800) 388-0902 to make arrangements for September 2009 payroll reports and payments. This program will be offered to employers through a series of newspaper announcements and mailings to all State Fund policyholders in the affected area.

INTERNATIONAL NEWS ZONE......

2009-09-01T20:11:00.000-07:00

Citing an "unacceptable" loss of life, the Transportation Safety Board (TSB) has launched an in-depth investigation into the safety of small fishing vessels across Canada.

"The grim reality is that the fishing industry is averaging one death per month," said Marcel Ayeko, TSB's director of Marine Investigations. "Sixty people have died in accidents over the past five years, and we need to find out why."

As an independent government agency, the TSB conducts dozens of full investigations into marine accidents every year. These result in public reports that contain a host of conclusions, concerns, and safety recommendations, but Ayeko said the problem is bigger than any one event. This study, he added, is expected to be the first to provide an overall view of the situation across the country. "We'll talk to everyone: vessel owners and operators, fishing associations, government, unions, and - above all - the fishermen," Ayeko continued.

"We already know there are systemic issues," he said, noting that small fishing vessels have the highest rate of marine accidents in Canada. With over 200 incidents reported to the TSB annually, "these issues need to be formally identified - to the regulators, the industry, and the fishermen themselves - so that we can improve safety and reverse this tragic trend."

The study will also look at the risks and challenges experienced by members of the fishing community when they set out for a day's work and will be released to the public and industry stakeholders when completed. To help with this, historical data and case studies of selected accidents in Canada will be analyzed, as will occurrences from other nations, including the United States, the United Kingdom and several Nordic countries. "The further in-depth we go," said Ayeko, "the more solid facts we'll uncover to help make the fishing industry safer."

Since 1992, the TSB has made 42 recommendations aimed at improving fishing vessel safety, and it has repeatedly drawn attention to critical safety issues that contribute to accidents. These include vessel stability, structural integrity, unsafe operating procedures, the use of lifesaving equipment, and the impact of fishery resource management plans and practices on the overall safety of fishing vessels.

NATIONAL NEWS ZONE......

2009-09-01T19:46:00.000-07:00

With Hurricane Jimena heading toward Baja, and September being one of the more active months of "Hurricane Season" each year, CSA Travel Protection compiled and offers 10 facts of U.S. hurricane trivia.

A tropical storm becomes a hurricane when winds reach 74 miles per hour.
The National Hurricane Center began naming tropical storms in 1953.
The naming of hurricanes alphabetically, alternating male and female names, began in 1979.
For the United States, September has had more major hurricanes than all other months combined.
However, five of the most devastating hurricanes did not occur in September: Katrina (August 2005), Andrew (August 1992), Camille (August 1969), Audrey (June 1957) and Hazel (October 1954).
The 2005 Atlantic hurricane season was the most active Atlantic hurricane season in recorded history, repeatedly shattering previous records.
Hurricane Katrina was the most costly hurricane in U.S. history, costing an estimated $75 billion.
The three deadliest hurricanes in US History are: Galveston, TX (1900) with 8,000 people reported killed; Lake Okeechobee, Fla. (1928) with 2,500 reported dead; and Katrina (2005) where 1,800 people perished in Louisiana and Texas.
Only three hurricanes, in the past 100 years, have hit landfall as a category 5: Florida Keys (1935); Camille (1969) in Mississippi, southeast Louisiana and Virginia; and Andrew (1989) in southeast Florida and southeast Louisiana.
The average life of a hurricane is nine days.

Storms are full of surprises, and while experts predict near-normal activity this hurricane season, there are potential mishaps that can happen even if a storm doesn't make an appearance on a trip. Anticipating the unexpected - such as medical emergencies, flight delays, identity theft or a natural disaster at home before leaving - and covering it with travel insurance will protect travelers from surprises. Travelers can find out more about CSA and travel insurance by contacting their travel agent.

A new Best’s Review cover story informs life/health agents how to value their businesses to plan for retirement or acquisition. “What’s Your Agency Worth?” tells the story of how a life insurance agency owner in Woodland Hills, California, found an investor that allowed her business to grow and also provided her with a long-term exit strategy.
This kind of story is likely to play out in coming years as owners of life/health agencies look for a way to access capital, find a buyer so they can retire, or both. About 26% of all life/health and property/casualty agents are self-employed, according to the U.S. Bureau of Labor Statistics.
Many life/health don’t have succession plans in place or know what their agencies are worth, said Chris Greis, president and founder of Leaders Partners Inc. Some principals plan to work until they drop, he said, or look for a young producer to come in and take over. Both of these plans are fraught with risk, he said.
The California life agency, Time Financial, was sold to an insurance wholesaler, but at the time of the sale the buyer and seller didn’t know the value of the business, said Kate Kinkade, Time’s president.
Measuring a life/health agency’s worth isn’t as simple as applying EBITDA or (earnings before interest, taxes, depreciation and amortization) as you can in valuing a P/C agency. Life/health agencies require a holistic view — evaluating the quality of the firm’s contractual relationships, market conduct record, insurance carriers and the kinds of retailers and brokers with which it works.
“What’s Your Agency Worth?” also features a sidebar containing three experts’ advice on selling a life/health agency.
September’s Other Highlights:
Read about how Native Americans are turning to captives to insure properties like Foxwoods Resort Casino in “Going Their Own Way.”

Congress is back in session and “Committees with Insurance Interests” examines which senators and congressman exert the greatest influence on the insurance industry.

Medical tourism brings to mind flying off to other countries to have medical procedures performed, but “Heading for Home” reports how some health plans are offering discounts for medical care performed at U.S. facilities.

“Open Door Policies” reports how Brazil’s market reforms are attracting reinsurers’ business.

To read these articles and more, subscribe to Best's Review by visiting www.bestreview.com, calling the A.M. Best customer service department at (908) 439-2200, ext. 5742, or e-mailing your request to customer_service@ambest.com.

DriveCam Inc., a global Driver Risk Management (DRM) company, announced support for legislation requiring states to pass laws banning text messaging while operating a moving vehicle. DriveCam also expressed support for the Distracted Driving Summit announced by the U.S. Department of Transportation where transportation leaders, members of Congress and safety groups will come together to reduce accidents and fatalities caused by distracted driving. DriveCam has been invited to participate in the Summit.
The bill (S. 1536) – Avoiding Life-Endangering and Reckless Texting by Drivers (ALERT Drivers) Act – was prompted in part by studies by Virginia Tech and the University of Utah, which found that drivers were much more likely to crash if texting while driving, according to Sen. Charles Schumer, D-NY, one of four sponsors of the legislation. These studies found that texting was more distracting to drivers than using a hand-held cellular telephone or being intoxicated.
"DriveCam unequivocally supports the goals of this bill," said Brandon Nixon CEO of DriveCam. "With a database of 13.5 million risky driving events, we see what’s happening on our nation’s roads every day. Texting is on the rise, as are the number of incidents – and deaths – as a result of this selfish behavior. Road safety is of paramount importance in ensuring every American’s right to get from one place to another safely."
Currently, texting while driving is banned in the District of Columbia and 14 states, including Alaska, California, Minneapolis, New Jersey and Virginia. Maryland's ban takes effect Oct. 1. The New York legislature recently passed such a measure and sent it to the governor for signature. This federal bill would require other states to write laws prohibiting text messaging by drivers or risk losing 25 percent of their annual federal highway money. States would have two years to enact such laws.

WESTERN NEWS ZONE......

2009-08-31T20:16:00.000-07:00

Firefighters and residences in the greater Los Angeles area are in a race against time, as a quick-moving wildfire has almost doubled in size and is threatening 10,000 homes as of Monday afternoon.

Fire officials have ordered mandatory evacuations for residents of the 10,000 homes under threat. The city of Los Angeles today issued a mandatory evacuation order for an area of Sunland-Tujunga bordering the Angeles National Forest from roughly Alpine Way on the north to Haines Canyon Avenue on the east.

According to one fire spokesman, The Station Fire had increased to 85,576 acres as of Monday morning. The blaze is only 5 percent contained while being fueled by dry air and protected by the steep terrain in and around the Angeles National Forest.

Officials are keeping a close eye on the blaze, which is being aided by warm temperatures and low humidity, as it creeps closer to the Mount Wilson Observatory. The facility holds 20 television and radio transmission towers along with fire and police communication equipment.

Tragically, two firefighters died Sunday when their vehicle went down a steep enbankment as they were battling the Station Fire.

Officials identified the dead as Capt. Tedmund Hall, 47, and Spc. Arnaldo Quinones, 35.

"Our hearts are heavy as we are tragically reminded of the sacrifices our firefighters and their families make daily to keep us safe," California Governor Arnold Schwarzenegger said in a statement issued Sunday. "This is a devastating day for firefighters everywhere, and Maria and I join all Californians in expressing our gratitude and sadness. Our hearts go out to their loved ones."

Two residents who ignored mandatory Station Fire evacuation orders were severely burned when they decided to wait out the blaze in a hot tub, according to sheriff's officials.

Both were severely burned when flames ripped through their Big Tujunga neighborhood Saturday.

The Station Fire began Wednesday and had destroyed 18 structures by Sunday. The fire also is threatening 500 businesses and 2,000 other structures. The blaze grew over the weekend in an area that has not witnessed a major fire in more than six decades.

Schwarzenegger declared a state of emergency Friday as a result of the Station Fire. He has also declared a state of emergency in Monterey County, where one blaze, called the Gloria Fire, has burned approximately 6,500 acres, and another, called the Bryson Fire, has charred more than 3,000 acres.

SOUTHEASTERN NEWS ZONE......

2009-08-31T20:12:00.000-07:00

Florida Insurance Commissioner Kevin McCarty has issued an Immediate Final Order to Peck & Peck Inc. (Peck & Peck), Green Cross Managed Health (Green Cross) and Depawix Health Resources Inc. (Depawix) to immediately cease and desist transacting the unauthorized marketing and selling of health insurance.

The Office of Insurance Regulation (Office) began investigating the activities of these companies earlier this year and has determined that they are marketing group and individual health insurance plans to small businesses and individuals, both directly and through licensed and unlicensed insurance agents, under the guise of selling an employment opportunity with Depawix that provides medical benefits. Groups and individuals who wish to participate in the Green Cross program are, in addition to any existing employment they may have with a Florida business, required to be “dually employed” by Depawix.

Among other requirements listed in the Immediate Final Order (IFO), the companies are required to report to the Office within 10 days of the issuance of the Order, a copy of all policies issued to residents of the State of Florida as well as a detailed spreadsheet compiling the information contained in all contracts issued. The Order also requires that the companies honor and otherwise fully service all valid claims on any and all policies the companies have executed.

The companies have 30 days to file an appeal of the Order with the District Court of Appeal.

The Office's investigation parallels a similar investigation by the Department of Financial Services' Division of Agent and Agency Services; the CFO has also issued an IFO against the agents and unlicensed representatives of these entities. Consumers may determine if an insurer is licensed in Florida by visiting the Company Search tool on www.floir.com.

EASTERN NEWS ZONE......

2009-08-31T20:08:00.000-07:00

HealthMarkets Inc. announced that its subsidiary insurance companies will focus solely on marketing its ancillary vision, dental and related specialty plans in Massachusetts and discontinue marketing health insurance products in the state after Sept. 30.

The company worked with the offices of the Massachusetts Division of Insurance Commissioner and the Massachusetts Attorney General to resolve all matters related to regulatory issues with the Division of Insurance dating back to 2003, and to litigation brought by the Attorney General’s office dating back to 2004. HealthMarkets stated that given the unique environment regarding health insurance in Massachusetts, marketing only ancillary products, underwritten by its subsidiary insurance companies, is the best business strategy going forward.

This decision has no impact on the company’s marketing efforts outside the state of Massachusetts.

HealthMarkets subsidiaries have approximately 27,000 health insurance members in Massachusetts, and will continue to service those members and administer the health insurance plans currently in-force in the state, consistent with the terms of the settlement agreements.

As a result of the voluntary agreements, the company will make payments totaling $15 million to the Commonwealth of Massachusetts, from which $11.25 million will be used by the Attorney General’s office to provide restitution or other relief to Massachusetts residents who meet certain criteria and $750,000 will be used for attorney’s fees and related costs. The payment includes a $3 million civil penalty and the company will be implementing a claims reassessment program under the terms of the agreement with the Division of Insurance. In addition, the companies have previously paid amounts of more than $2.1 million in claims remediation in Massachusetts since litigation commenced.

NATIONAL NEWS ZONE......

2009-08-31T20:04:00.000-07:00

National Interstate Insurance Company has added a consignment coverage endorsement to its recreational vehicle product line.

This endorsement, offered by only a limited number of insurance companies, was designed to provide additional protection for RV owners who sell their units on a consignment lot. Distributed exclusively through appointed agency partners, National Interstate is currently offering consignment coverage in 27 states, and the endorsement is available on both new and existing policies.

Most RV insurance policies list RV consignment as an excluded usage, meaning that when an RV owner places their unit for sale on a consignment lot, physical damage coverages are removed. In addition, RVs are seldom, if ever, insured under the dealership's policies.

National Interstate offers a portfolio of specialty products for recreational vehicle owners. The company is rated "A" (Excellent) VIII by A.M. Best Company. To learn more about National Interstate's consignment coverage, contact Jason Sinkovitz at 800-929-1500, or email: Jason.Sinkovitz@NATL.com.

NATIONAL NEWS ZONE......

2009-08-28T17:50:00.000-07:00

Proponents of health reform say they want a government-run health insurer to give people more choice in how they are insured. Industry opponents say there is plenty of choice in the existing market, which includes hundreds of insurance companies across the United States.

While it’s true that many markets are flush with choice, people living in some states have few options for insurance — with almost all consumers ending up in the same plan, according to an article in BestWeek U.S./Canada. An early 2009 report from the Government Accountability Office that ranked the market share of insurers in each state pointed out that 17 states had a single insurer that served at least half of the market.

Also, in BestWeek Europe, Belgian insurer Fortis has reported a group net profit after minority interests of 886 million euros (780.6 million pounds) for the first half of 2009, showing a marked recovery from the same period of 2008, when it made a profit of just 25 million euros. This was driven by a number of events related to the closing of the transactions with BNP Paribas, the Belgian State and Fortis Bank, as well as a net-of-tax charge of 301 million euros related to the legal dispute with Fortis Capital Co. Ltd., the company said.

The death of Sen. Edward Kennedy, beyond its tragic weight for his friends, constituents and public admirers, further highlights a basic math problem that his Democratic colleagues in the Senate have been facing, according to an article in BestWeek U.S./Canada. It takes one vote away from Democrats, dropping the number they can muster to 59 — not a filibuster-proof majority. But the truth is, they never experienced filibuster freedom.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit www.ambest.com/sales/BestWeek, or e-mail your request to customer_service@ambest.com.

WESTERN NEWS ZONE......

2009-08-28T17:47:00.000-07:00

With several fires forcing the evacuation of thousands of California residents near Rancho Palos Verdes and La Canada Flintridge, homeowners in hillside and brush areas are reminded of the importance of a family disaster plan.

Homeowners often have only minutes to evacuate, and in a panic may forget critical items such as financial documents, medications and other items.

Those not immediately threatened by fire should take the time to create a home inventory and family evacuation plan in the event that fire threatens their neighborhood. In other fire prone areas, residents should create a defensible space around their homes by trimming trees and shrubs on their property.

B-roll illustrating evacuation do’s and don’ts, as well as information on preventing underinsurance and creating a home inventory, is also available for your review on IINC’s Web site at www.iinc.org and the IINC Spots podcast at www.iincspots.org. Information specific to wildfire preparation and recovery is also available at “Disaster Central” at http://www.iinc.org/pages/The%20Wildfire%20Page.

California Insurance Commissioner Steve Poizner announced that he will file a lawsuit to have the $1 billion sale of State Compensation Insurance Fund (SCIF) assets declared unconstitutional.
Poizner indicated the transaction could lead to major workers' compensation insurance costs for California's construction firms, agricultural industry and other small businesses.
"In these tough economic times, the state should be doing everything possible to create jobs, not use budget gimmickry to hurt the economy," Poizner said in a statement. "The Schwarzenegger Administration simply got it wrong with their proposal and the Legislature failed to adequately scrutinize the consequences."
"Selling SCIF at fire-sale prices could further destabilize the workers' comp market in California, and Commissioner Poizner is right to demand a halt to the governor's plans," according to the Los Angeles-based group Consumer Watchdog.

Overall, SCIF sells close to one out of every five workers' compensation insurance policies in the state.
The lawsuit will likely be filed in Sacramento County Superior Court in the coming days.

WESTERN NEWS ZONE......

2009-08-27T11:07:00.000-07:00

California Insurance Commissioner Steve Poizner announced in Los Angeles Wednesday that recently compiled Department of Insurance statistics show that financially desperate residents and scam artists may be committing more automobile insurance fraud to cash in on insurance money. The Department of Insurance has seen an increase in suspected auto arson and auto theft fraud referrals last year.

The Department of Insurance receives referrals of suspected fraud cases from insurance companies, local law enforcement agencies and directly from consumers. CDI enforcement officers carefully examine every case that is brought to the Department's attention.

CDI saw an alarming 31 percent increase in suspected vehicle arson fraud cases in 2008 as compared with referred cases in 2007. (In 2007, CDI received 344 referrals for suspected automobile arson; in 2008, CDI received 451 referrals for suspected automobile arson.) Overall, the Department received almost 300 additional suspected vehicle theft and vehicle arson cases statewide in 2008 than in 2007. CDI received approximately 200 more suspected vehicle theft fraud case referrals in 2008 than in 2007.

While the total number of suspected fraud case referrals received by CDI for all automobile fraud categories (including inflated damages, vandalism and hit and run,) has remained relatively constant since 2007, suspected vehicle arson and theft referrals have noticeably increased.

Poizner oversees 16 CDI Enforcement Branch regional offices throughout the state. Close to 1900 insurance fraud-related arrests have been made by the Department of Insurance's enforcement division since Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.

NATIONAL NEWS ZONE......

2009-08-27T10:56:00.000-07:00

Unfortunately, many United States residents have been impacted negatively by the downturn of the economy often leading to the unwise decision of either lowering or cancelling automobile insurance coverage to save money. The serious risks and consequences of such decisions are often not realized, turning out to be more costly in the long run.

Failure to Maintain Mandatory Insurance Coverage

All but two states make having some kind of protection mandatory in order to operate vehicles legally. Driving without proof of financial responsibility may result in citations and even the impounding of vehicles. Some states may even suspend driving privileges and vehicle registrations and the penalties and fines incurred will most likely turn out to be far more costly than having maintained coverage in effect.

Furthermore, a person financing a vehicle is usually required by their lien holder to have "Comprehensive and Collision" coverage in order to protect their automobile for physical damage and theft. Failure to maintain such coverage may lead to the forced placement of a policy by the financing institution where the premium is usually much higher than what an individual would normally pay, resulting in an increased financial burden.

The Dangers of Uninsured or Underinsured Driving

Various types of coverage are designed to protect an insured's investment in their vehicle, pay medical damages and cover legal liability to other's injury or damages as a result of an accident. Without a policy in force or without the proper coverage, a person would have to bear the entire cost in the event of an accident, leading to a crippling financial loss.

It's far too expensive and dangerous to cancel or lower coverage. As advised by most government-issued consumer guides, comparison shopping for the right insurer increases the chances of finding affordable premiums without having to compromise the desired protection.

Small business owners are struggling to provide health insurance for their staff and do not feel confident in determining the health insurance that best fits their employees’ needs, according to a new survey by the National Association of Insurance Commissioners (NAIC). The finding highlights the need for more insurance education, even as the debate over national health care reform continues around the country.
In the NAIC survey, conducted July 22-31, among a participant sample of 500 small business decision makers, 64 percent of small business owners responded that they are not confident picking a health insurance policy that fits their budgets and their employees’ needs. One-third admitted that they cannot afford to provide health insurance to their employees.
Additionally, the study found a clear gap in understanding the fiscal responsibilities associated with offering health insurance. Of the small business owners surveyed, 60 percent said they are not confident they understand the tax implications of paying for a portion of their employees’ health insurance premiums. Only 27 percent say they understand all the factors that can affect their small group health premiums.
“In this economic environment, small business owners need to be especially mindful of any decision that will affect their financial future,” said NAIC President and New Hampshire Insurance Commissioner Roger Sevigny. “Now, more than ever, it is important they get smart about their choices and consider the implications that making a bad decision could have on their business and their employees’ future.”

MIDWEST NEWS ZONE......

2009-08-26T19:59:00.000-07:00

Two subsidiaries of United Healthcare, based in St. Louis, will pay $536,000 in fines and reopen chiropractic claim files it denied since 2004.

Under a settlement with the Missouri Department of Insurance, United Healthcare has agreed to reexamine at least 50,000 claims filed by chiropractors who treated the company’s policyholders. The Department of Insurance found United Healthcare violated state insurance laws by limiting coverage to 26 visits per year. In other cases, the department says the company failed to evaluate the medical necessity of treatment before denying claims.

For any chiropractic claims it finds were improperly denied, United Healthcare must reimburse the physicians for those claims, plus interest. In some cases, consumers may have paid the bills, rather than the chiropractors. Those consumers should contact United Healthcare at 800-873-4575. Patients or chiropractors with questions about the settlement can the Department of Insurance Consumer Hotline at 1-800-726-7390 or visit insurance.mo.gov.

The department conducted a market conduct examination of United Healthcare, after patients and chiropractors filed complaints about the company denying claims. A 2004 Missouri law requires health insurance companies to cover the costs of at least 26 chiropractic visits per year without prior authorization.

For the first 26 visits, coverage can only be denied if the treatment is determined not to be medically necessary. The department’s exam reviewed United Healthcare chiropractic claims since the law took effect.

EASTERN NEWS ZONE......

2009-08-26T19:55:00.000-07:00

New York State Insurance Department personnel will be sent to Silver Creek starting Thursday to continue providing consumer assistance with insurance-related issues in the aftermath of the serious flooding that affected Chautauqua, Cattaraugus and Erie Counties earlier this month.

The Insurance Department's Mobile Command Center will be located at Mt. Carmel Church, 165 Central Ave. in Silver Creek from 8 a.m. to 8 p.m. on Thursday and Friday. Personnel staffing the command center will be available to answer inquires regarding insurance policies and coverage, as well as to assist with insurance-related complaints.

The mobile command center is currently located at Gowanda Village Hall at 27 East Main St.

In addition to the on-site disaster recovery assistance, residents seeking help on insurance questions may also contact the Department's Disaster Hotline 1-800-339-1759 on weekdays between 9 a.m. and 5 p.m.

Homeowners' policies do not usually cover damage from floods, but such coverage is available through the National Flood Insurance Program. Owners of damaged vehicles whose automobile insurance policies contain comprehensive coverage, also known as "other than collision," are covered for flood damages.

The disaster recovery efforts follow serious flooding that occurred Aug. 9-10.

WESTERN NEWS ZONE......

2009-08-26T19:50:00.000-07:00

California Insurance Commissioner Steve Poizner held a hearing Tuesday for Santa Barbara residents to discuss any concerns they have with the availability of private homeowners insurance and the Fair Plan.

"I heard Santa Barbara residents loud and clear when they called for an opportunity to voice their concerns about the Fair Plan and the availability of homeowners insurance in their neighborhoods," said Poizner. "I am here today to work directly with homeowners and all stakeholders to address these issues. I'm proud to say that through productive negotiations, we have already worked with the Fair Plan to make significant changes, based on feedback from wildfire survivors. I look forward to the progress we will continue to make together."

Poizner welcomed all stakeholders to attend the hearing for the purpose of gathering information and feedback from policyholders, insurance agents and brokers, consumer groups and Fair Plan representatives.

The Commissioner plans to use information gathered in the course of the hearing process to determine recommendations he may make to improve the availability of private homeowners insurance in wildfire areas, and how Fair Plan policies are assigned.

Poizner has been working with consumers through town hall meetings and hearings to assess concerns about Fair Plan policies. In working with the Fair Plan to highlight major concerns, the insurer has already submitted revisions to they way they write fire policies. Major proposed changes include an increased dollar amount of coverage available for building code upgrades. When fire victims rebuild homes, they must comply with up-to-date building code regulations. This can be costly, and the Fair Plan has agreed to increase the previous limit to reflect the high cost of upgrading older residences to meet modern building code standards.

Another change submitted as a result of Poizner's work is the creation of a separate policy limit for living expenses when policyholders lose their homes. Previously, living expenses incurred while a home was rebuilt would be deducted from the rebuilding limit of the policy. The Fair Plan is now working to create separate coverage limit for living expenses.

Poizner continues to work with Fair Plan and policyholders to address major concerns and make changes and improvements to the policies written by the Fair Plan.

SOUTHWESTERN NEWS ZONE......

2009-08-26T19:41:00.000-07:00

Combined Agents of America LLC (CAA), at its quarterly board meeting in Austin, Texas, announced its expansion to 42 members with new member, Hill County Insurance Agency Inc. in Hillsboro, Texas.

With a strong presence in Texas, Oklahoma and Kansas, CAA is a managing general agency (MGA) looking to further expansion across the country to strengthen the independent agency system through profitable growth and exceptional service for its member agencies.

"By joining CAA, our agency gained access to new insurance markets and programs that will provide our customers and prospects with broader solutions for a variety of risks," said Bill Siddons III, new CAA member and vice president of Hill County Insurance Agency. "Not only does Hill County Insurance Agency benefit from the external relationships CAA built with insurance providers, but it has already begun to tap into the wealth of industry knowledge fostered among the 42 high-caliber CAA member agencies."

Started in 1912 and family-owned and operated by the Siddons family since 1921, Hill County Insurance Agency has provided a full range of personal and business insurance solutions to central Texas residents for over 90 years. W.W. "Bill" Siddons, Jr., president, took the helm as the second-generation leader at Hill County Insurance and began managing the office in 1956. W.W. "Bill" Siddons, III, vice president, joined the agency full time in 1990. His industry participation includes serving as past president of the Independent Insurance Agents of Central Texas. Also he served on the Agent Advisory Boards of the Hochheim Prairie Insurance Co., Allstate Insurance Company, and Blue Cross Blue Shield Insurance Company.

"Bill Siddons is a very professional insurance agent who wants to grow his agency in central Texas, and we at CAA are proud to have him as a new member," said Bill Bridges, CAA chairman and executive vice president of Duncan, Fraser & Bridges, Pampa, TX. "We have already seen Bill's skills go to work for the Independent Insurance Agents of Texas where he actively serves on the board of directors alongside chairing several committees. We know Bill's broad experience and networking capabilities will greatly benefit CAA."

CAA's member agencies convene on a quarterly basis to knowledge share, discuss industry issues, review its relationships with insurance carriers, and assess CAA operations. Highlights from the recent board meeting include:

New member presentation to independent agency prospects,
Insurance carrier presentations by Swett & Crawford Group, Service Lloyds Insurance Company, Fireman's Fund Insurance Company and Brown & Brown Inc.
Brown & Brown sponsored social for CAA members,
Swett & Crawford sponsored lunch for CAA members,
Member golf tournament at Falconhead Golf Club in Austin, TX.

NATIONAL NEWS ZONE......

2009-08-25T18:43:00.000-07:00

Travelers National Accounts has unveiled a Money Market Collateral Account solution.

The new product, offered exclusively to qualified Travelers National Accounts, Construction and Discover Re customers, provides clients an alternative to posting Letters of Credit (LOCs). Discover Re is the "unbundled" alternative risk transfer unit of Travelers.

Customers that qualify for the Money Market Collateral Account option will be directed to a licensed representative of the securities firm administering the Money Market Collateral Account, who will provide a prospectus, details on investment options and instructions on how to proceed.

From there, customers will have the ability to invest the collateral provided to Travelers in a number of National Association of Insurance Commissioners (NAIC) approved Money Market Mutual Funds, U.S. Treasuries or other government instruments. The disbursement of interest, dividends or other investment income in excess of the required collateral amount may be requested on an annual basis.

WESTERN NEWS ZONE......

2009-08-25T18:37:00.000-07:00

A poll by PEMCO Insurance reveals that the practice of reading and sending text messages while driving has more than doubled in the past 18 months, even while an increasing number of drivers believe the activity is unsafe.

The poll, taken in June 2009 shows that 18 percent of Washington drivers who use electronic devices admit to reading or sending text messages while driving, although University of Utah research suggests such behavior increases the likelihood of accidents eight-fold. Only six percent of respondents using electronic devices admitted to texting behind the wheel in February 2008.

The poll also showed that while more drivers are tapping messages on cell phones than before, a higher percentage of Washington drivers think the behavior is dangerous.

PEMCO found that 45 percent of those polled are more concerned with the driving distractions caused by text messaging than other distractions like talking on a cell phone, speeding or driving while tired - which is up significantly from the 32 percent of drivers who reported their concern for texting in 2008.

The poll also showed that a significant majority of Washington drivers want the laws surrounding texting to be strengthened. Currently, Washington classifies cell-phone related violations as secondary offenses, which means that the driver must be committing a primary violation like speeding to be cited for texting or talking without a hands-free device.

However, PEMCO's June 2009 data shows that 70 percent of drivers believe that the text-messaging law should be changed from a secondary to a primary offense. Similarly in 2008, 73 percent of drivers agreed texting should be a primary offense.

Surprisingly, when it comes to talking and driving, the poll showed data suggesting an increased acceptance for Washington's hands-free cell phone law as a secondary offense. In 2009, 58 percent support the law as a primary offense, which is down from 60 percent in 2008 and 65 percent in 2007.

This latest PEMCO poll further shows drivers are unclear whether talking on a hand-held cell phone while driving is a primary or secondary offense, with 50 percent incorrectly reporting it as a primary offense.

Overall, 94 percent of respondents do know that using a cell phone behind the wheel is against the law, with a majority reporting that it should only be legal to use a cell phone if using a hands-free device.

* Employers Direct Insurance Company (EDIC) (www.employersdirect.com) has signed a definitive agreement to sell the renewal rights of its direct placed workers’ compensation insurance policies to GNW-Evergreen Insurance Services LLC (www.gnw-evergreen.com).

Headquartered in Encino, GNW-Evergreen is one of the largest independent insurance brokerages based in Southern California. EDIC has previously announced that they are discontinuing direct sales and plan on distributing their workers’ comp policies exclusively through independent agents and brokers in the future.

EDIC will appoint GNW-Evergreen as a producer in Arizona, California, and Nevada following the close of the sale.

SOUTHWESTERN NEWS ZONE......

2009-08-25T18:30:00.000-07:00

Farmers Insurance Group of Companies has teamed up with The Arkansas Grocers & Retail Merchants Association and revised their 10-year relationship to strengthen its member's benefits.

Types of businesses eligible for this program are: Retail Stores, Restaurants, Fast Food Restaurants, Doughnut Shops, Deli's, Coffee Shops, Bakeries, Dry Cleaners and over 80 additional types of small businesses.

The new program offers:

Small retail, service providers and restaurants the ability to have the same benefits as larger retailers, service providers, restaurants and franchises
Potential dividend to the Association and its Members
Loss Prevention and Safety Programs
Local specialized agents
Award winning claims services

Specialized Coverage's including:
- Employment Practices
- Property & Casualty
- Workers' compensation
- Commercial Auto
- Business Interruption
- Group Life and Long Term Care
- Financial Solutions

Contact Ray Roberts (Administrative Agent for program) Phone (501) 945-0555 or email rroberts@farmersagent.com for more information.

SOUTHEASTERN NEWS ZONE......

2009-08-24T20:52:00.000-07:00

Norvax Inc., a provider of sales automation and web marketing tools for the health insurance industry, announced that the Norvax Insurance Quote Engine now includes CIGNA plans for Florida.

CIGNA-appointed health insurance brokers and agents licensed in Florida can now generate instant quotes on Individual and Small Group health plans for consumers in the Sunshine State.

In addition to quoting CIGNA plans for Florida consumers, Norvax quote engine users can also generate quotes for CIGNA Individual and Small Group plans in Arizona, Colorado, Florida and Texas.

For more information about the Norvax Quote Engine, health insurance agents and brokers can call 1-866-466-7829 ext. 1, or visit the Norvax Web site at www.Norvax.com. Consumers can access this technology directly through Norvax's consumer Web site www.gohealthinsurance.com.

MIDWEST NEWS ZONE......

2009-08-24T20:34:00.000-07:00

A Pittsburg, Kansas man has pled guilty to arson for his reported part in an insurance scam last year.

According to prosecutors, in November 2008, Wendall Martin asked James Pryor and Sidney Ulmer to burn down his house in Pittsburg to collect insurance money on the home.

Martin has pled guilty to solicitation to commit a felony for his part and will be sentenced on Oct. 5.

Pryor pled guilty to burning the home at Martin’s request, and will be sentenced next month.

Ulmer will face a jury trial in December on charges of arson.

EASTERN NEWS ZONE......

2009-08-24T20:20:00.000-07:00

IS Partners LLC and Interactive Solutions LLC, national providers of business advisory services to America's insurance companies, and Invotex Group, national provider of accounting, financial consulting and risk management services to insurance companies and regulatory agencies, will host the Third Annual Risk Management Insurance Conference on Sept. 16 and 17, at Citizens Bank Park in Philadelphia. For more information or to register for this event, visit www.interactivesolutionsllc.com.

The conference will feature workshops and forums on such topics as Risk Management for Insurers, Reinsurance Modernization, Credit & Market Risk and more, each led by renowned industry professionals.

The two-day conference will be held at Citizens Bank Park, home of the World Champion Philadelphia Phillies, located at One Citizens Bank Way in Philadelphia. At the conclusion of the first day, all attendees are invited to attend the ballgame versus the Washington Nationals.

SOUTHEASTERN NEWS ZONE......

2009-08-21T19:53:00.000-07:00

Florida Insurance Commissioner Kevin McCarty announced that he has received the latest rate filing from the National Council on Compensation Insurance (NCCI) for workers' compensation insurance rates due to become effective Jan. 1, 2010. The filing includes an overall average rate decrease of 6.8 percent statewide, which would produce a savings of more than $166 million for Florida employers.

If approved, the rate decrease would be the seventh consecutive decline since the Legislature passed sweeping reforms to the state's workers' comp system in 2003. The cumulative overall statewide average rate decrease since 2003 would total 63.2 percent.

Before the 2003 legislative reforms were passed, Florida ranked as the first or second state with the highest workers’ comp rates in the country. Last year, studies showed that Florida had dropped to the 28th highest. However, updating those studies with the rate changes the Office approved earlier this year, plus this NCCI filing, Florida’s ranking could now be among the 10 lowest states in the country.

NCCI, which produces and files rates for insurers in many states, noted the rate decline was primarily due to a significant reduction in claims frequency although there are signs the pace of improvement has moderated.

The Office will schedule a rate hearing in October, and the rate change would be effective for new and renewal business as of Jan. 1, 2010.

WESTERN NEWS ZONE......

2009-08-21T19:49:00.000-07:00

A.M. Best Co. will exhibit at booth #206 at the Chartered Property Casualty Underwriters Annual Meeting and Seminars, set for Aug. 29–Sept. 1 at the Sheraton Denver Downtown Hotel in Denver, Colo. Visitors to A.M. Best’s booth can speak with company representatives, see product demonstrations and pick up informational brochures.

While at A.M. Best’s booth, attendees will learn how they can:

Examine in-depth analysis of insurers, reinsurers and groups with the new online Best’s Insurance Reports^® – Property/Casualty – United States & Canada
Underwrite with confidence using Best’s Underwriting & Loss Control Center
Perform targeted analysis and strategic planning using the aggregated data contained in Best’s Aggregates & Averages – Property/Casualty – Online
Obtain additional information about A.M. Best's property/casualty products and more by visiting A.M. Best booth #206 at the CPCU Annual Meeting and Seminars, or by visiting www.ambest.com/sales.

More information about the conference is available at www.cpcusociety.org.

Ventura County (Calif.) District Attorney Gregory Totten announced that Paul Lafflitio (DOB 6/25/1984) of Simi Valley was sentenced after previously pleading guilty to felony evading a peace officer and felony auto insurance fraud.
Lafflitio was placed on formal probation for three years and ordered to serve 218 days in the Ventura County jail. He was ordered to pay restitution of $1,278 to Alliance United Insurance Company and an additional $1,592 to the property owners where he crashed his truck.
On March 25, 2009, at 9 p.m., two Simi Valley Police Department officers were working undercover in an unmarked patrol vehicle. They were stopped for a red light at the intersection of Sycamore and Royal when they saw a silver Dodge Ram pick-up truck approach the intersection. The Dodge failed to stop for the red light. As the Dodge drove through the intersection, one of the officers shined his spotlight into the cab of the Dodge and got a good look at the driver, Lafflitio. The officers tried to pull over the Dodge but the truck sped away. Lafflitio drove at times between 90 and 100 mph while fleeing from the officers. Because he was driving so fast and recklessly, the officers decided to terminate the pursuit. Minutes later, however, the officers discovered Lafflitio's truck crashed and abandoned on private property off Wood Ranch Parkway.
The officers discovered Lafflitio was the registered owner of the truck and called him. Lafflitio answered his cell phone and told the officers that he was “night-clubbing” in Hollywood . He added the vehicle must have been stolen from where he last parked it in Simi Valley . He said he would come to the police department the following day to report it stolen. Unbeknownst to Lafflitio, both officers got a good look at him driving as the pursuit began.
Additionally, cell phone tracking evidence placed Lafflitio in Simi Valley at the time of the pursuit, not in Hollywood as he told the officers. When Lafflitio arrived at the Simi Valley Police Department the next day, he was identified and arrested.
The officers subsequently learned that prior to arriving at the police department, Lafflitio called Alliance United Insurance Company and falsely reported his vehicle was stolen.

NATIONAL NEWS ZONE......

2009-08-21T19:44:00.000-07:00

Kaplan Compliance Solutions (KCS), a provider of service and technology solutions designed to eliminate paperwork and reduce compliance risk for the insurance and securities industries, announced that Esurance, the direct to consumer personal auto insurance company, is the latest customer to migrate to the Compliance Management System Generation 2™
(CMS G2™) platform, KCS’ flagship compliance automation solution.

Esurance has licensed the CMS G2 Database Module (DBM) to house their licensing data. Essentially, the DBM is a unique and powerful database that manages securities and insurance compliance data in one centralized solution. DBM offers the ability to view, track and manage data for carriers, firms, branches and registered individual representatives and producers.

For Esurance, it will also manage the electronic submission of appointments and appointment terminations to the Departments of Insurance for processing.

The CMS G2 system gives Esurance agents read-only access to the database, providing 24/7 access to license information. Esurance plans to roll out this feature in early 2010. In addition, Esurance will utilize the CMS G2 NIPRSM alerts to automatically update portions of their database, eliminating most manual verification of license effective dates.

“CMS G2 is a powerful tool for Esurance’s licensing department. Now we can quickly and reliably manage the licensing and appointments of our producers,” said Kim Zanola, licensing supervisor at Esurance.

WETSERN NEWS ZONE......

2009-08-20T16:05:00.000-07:00

California Insurance Commissioner Steve Poizner announced that Joseph Baiden, 56, of Diamond Bar, surrendered to the Los Angeles Superior Court pursuant to an arrest warrant issued for eight counts of workers' compensation insurance premium fraud against State Fund. Baiden is being held on $1.64 million bail.

The arrest came as the result of an investigation by the California Department of Insurance (CDI). Along with the arrest, CDI froze Baiden's bank accounts and seized numerous properties (listed at bottom) throughout the Los Angeles area estimated at $4 million. His primary residence was located in an exclusive, gated hilltop neighborhood in Diamond Bar.

The case is being prosecuted by the Los Angeles County District Attorney's Office. Each count is a felony and, if convicted on all counts, Baiden faces a maximum of 40 years in prison as well as $3.2 million in fines.

In September 2008, CDI received a referral from State Fund alleging that Baiden, doing business as Nurse Connection Inc., was underreporting his workers' comp payroll on the quarterly payroll reports. According to the referral, State Fund received an anonymous tip that Baiden had falsified payroll records as well as California and federal tax filings for the years 2001-07. It is alleged that Baiden misrepresented $20 million in Nurse Connection's payroll to conceal the actual risk to the insurance carrier, thereby illegally reducing his workers' comp insurance premiums. State Fund's estimated loss over this seven-year period is approximately $1.4 million.

Based on the investigation, additional charges may be filed at a later date.

EASTERN NEWS ZONE......

2009-08-20T16:01:00.000-07:00

New York Gov. David Paterson announced that GEICO will open a new operations site in Amherst in Erie County, for the GEICO Insurance Agency.

The company, a subsidiary of GEICO, will sell homeowners, renters, boat and other types of insurance coverage. GEICO will invest $2.4 million in the expansion, creating an estimated 300 new jobs over three years and laying the foundation for future growth.

The key component in attracting GEICO Insurance Agency to Amherst was to certify the location and GEICO entity as a Regionally Significant Project (RSP) for an Empire Zone. With the support of the Town of Amherst, the Town of Tonawanda Empire Zone will serve as the local Empire Zone administrator and provide this designation. The collaboration and approval given by both towns was instrumental to getting GEICO Insurance Agency and the Amherst location RSP designation.

To support the company’s efforts, GEICO will receive an estimated value of $1.5 million in Empire Zone tax credits over the next five years from Empire State Development. Further, the company will receive sales tax exemption on equipment purchases from the Amherst Industrial Development Agency and an extension of low-cost power to 2013 from the New York Power Authority for the company’s Amherst facility. Additionally, the Erie and Niagara County Workforce Investment Boards will provide GEICO with workforce training assistance, as well as connect available workforce with the company.

INTERNATIONAL NEWS ZONE......

2009-08-20T15:57:00.000-07:00

The number of female van drivers on British roads has reached an all time high, according to research by a commercial vehicle insurance provider.

Swinton Commercial has found a 23% rise in enquiries from women looking to purchase van insurance from this time two years ago. The growing number of female entrepreneurs or women working in trade professions such as plumbers and electricians is believed to be responsible for the rapid rise in 'Fem-Van' drivers.

A poll of 1,000 female van drivers by Swinton Commercial, found that 81% use the van as part of their own business and 19% drive on behalf of an employer. The survey also uncovered that the main use of the female van, or 'fem-van' was for deliveries.

Despite preconceptions, the most popular 'fem-van' colour was white (78%) followed by silver (17%) and thankfully only one female admitted to driving a pink van.

NATIONAL NEWS......

2009-08-20T15:53:00.000-07:00

Mitchell International Inc., a provider of information, workflow and performance management solutions to the Property & Casualty claims and Collision Repair industries, announced the conclusion of its Industry Week Conference, held Aug. 3-7 at the Hard Rock Hotel in San Diego.

Collision repairers, insurers, and industry partners came together and took advantage of the opportunity to attend this event to learn new tools and techniques, strategies, and best practices to help drive high operational performance in their businesses.

The Conference brought industry participants together, offering each group valuable information targeted toward their specific business needs. Guest speakers inside and outside of the industry gave special presentations to help collision repairers learn about the tools and tactics they can leverage to help their operations gain a competitive edge and power the future of their business as the industry rebounds.

Claims professionals participated in informational roundtable discussions on events impacting the claims industry and shared their innovative and alternative perspectives. The Industry Parts Panel, for example, moderated by Mitchell's Vice President of Industry Relations, Greg Horn, included panelists such as Insurance Auto Auctions Senior Vice President Don Hermanek, American Honda Parts Marketing/Collision Group Assistant Manager Gary Ledoux, APU Solutions CEO Charles Lukens, Car-Part.com President Jeff Schroder; and LKQ Corporation's Vice President of Operations Rob Wagman, who discussed the current challenges of the collision parts supply and offered insight into how to overcome these obstacles. All Industry Week attendees participated in joint sessions to hear from highly-acclaimed key-note speakers, to network, and share best practices and management techniques.

Mitchell's Industry Week Conference also included the annual meeting of the Mitchell Editorial Advisory Board, a longstanding entity that has convened since 1989, to tackle the critical issues affecting both insurers and shops. Editorial Advisory Board members represent both large and small repair shops, insurers and industry organizations, all of whom are committed to improving the business performance and experience of all participants in the collision repair process.

PEOPLE IN THE NEWS ZONE......

2009-08-19T21:02:00.000-07:00

ZRG Partners Inc., a Boston-based global provider in Executive Search and Talent Management Solutions, announced the addition of Terry Clarke as managing director and head of the firm’s insurance practice. Clarke will be opening a new Chicago office for ZRG Partners and will head up the continued expansion of the firm’s insurance industry practice.

ZRG Partners and its subsidiaries are entering their 10th year of providing capital services to several key markets including Financial Services, Health Care and Life Sciences, Technology, Energy, and Education. Headquartered in Boston, ZRG Partners maintains strategic branch offices throughout The Americas and Asia.

Farmers Insurance Group of Companies announced the appointment of Paul Patsis, a 35-year insurance veteran, to executive vice president of Farmers Group Inc., and president of market management. Patsis moves to his new position from president and chief executive officer of Farmers Life.
In May 1998, Patsis joined Farmers as president and CEO of Farmers Life. He was promoted to executive vice president, Farmers Group Inc., effective January 2007.

Stephen Hunckler has joined the State Auto Insurance Companies as chief claims officer.

Hunckler was most recently executive vice president and chief claims officer at Balboa Insurance in Irvine, Calif., where he was responsible for overall claims execution and strategy supporting the company’s $3 billion book of business.

Hylant Group announced the addition of Tony Evans to their Chicago office.
Evans joins the firm as senior vice president and client executive with more than 20 years of industry experience. He will be responsible for leading the office in business development efforts, as well as assisting the Illinois and Michigan region with large account and risk management opportunities.

NATIONAL NEWS ZONE......

2009-08-18T20:27:00.000-07:00

Insure.com is offering the following tips for making sure one's college student is properly insured.

Car insurance:

If your child is taking a car to school, you must notify your insurance company if the car will be garaged at another location. This could alter your premium either up or down. Failure to reveal such a change can jeopardize a later insurance claim.
If your student owns a car, he or she must have his or her own car insurance policy. Again, inform the insurance company if the car will be located away from home.
If your student is not taking a car to school, you can likely save money on car insurance premiums. Notify your agent that your child is now driving the car only occasionally and ask that your bill be adjusted accordingly.

Home insurance:

Check with your home insurance company to see if you have adequate coverage for property in a student's dorm -- especially if your child has an expensive computer and other costly electronics.
Parents' home insurance does not extend to an off-campus apartment rented by your child; for that they'll need renters insurance.

Health insurance:

Most health insurance plans will allow your dependents to remain on your plan until they reach a certain "cutoff age" (usually 23 to 25 years old). However, the plan may also require that your child attend school full-time in order to remain insured.
If you have a managed care plan, such as an HMO, it will have geographical doctor-network limits. That means the health plan might be worthless far away from home and outside the plan's network of providers, except for emergency room visits.
Find out what the college health plan covers. Visits to the college health center are usually free, and your student will have a co-payment for lab tests, X-rays and prescriptions.
Find out if the college health plan covers pre-existing conditions and whether there is coverage during school vacations.
If your child is a college athlete, he may not be covered for injuries sustained during practice or a game. Check your health insurance policy to determine if your child is covered in the event of a sports-related injury.

Life insurance:

Would your child be able to continue college in the event of your death? If you don't have a sufficient amount of money in savings or other assets to cover the college years, consider buying a term life insurance policy for the duration of your child's college education.

EASTERN NEWS ZONE......

2009-08-18T20:17:00.000-07:00

Philadelphia Insurance Companies (PHLY) will be hosting a product fair at PNC Park, home of Pittsburgh Pirates, on Aug. 19, from 3 p.m. - 6 p.m. in the Press Room.

The product fair is an open-house-style event for insurance agents highlighting all of PHLY's products, including their newest Pest Control, Environmental, and Security Services (The Guardian). Agents are encouraged to attend to learn more about products, coverages and meet with PHLY representatives. Additionally, agents will have the opportunity to donate to Auberle Inc., a non-profit that provides services for troubled children local to the Pittsburgh-area.

To locate the office nearest you or for more information, visit PHLY on the web at www.phly.com or contact Elizabeth Bell at (610) 617-7734.

New Jersey Attorney General Anne Milgram and Division of Criminal Justice Director Deborah Gramiccioni announced that a Mays Landing woman pleaded guilty to illegally collecting more than $4,000 by submitting fraudulent disability insurance claims.
According to Acting Insurance Fraud Prosecutor Riza Dagli, Da’Lynn White, 31, of Mays Landing, pleaded guilty in Atlantic County to second-degree insurance fraud, a charge contained in a May 13 indictment. White also pleaded guilty to two counts of identity theft brought by the Atlantic County Prosecutor’s Office. The Office of Insurance Fraud Prosecutor and Atlantic County Prosecutor’s Office will recommend a sentence of five years in state prison on all of the charges.
In pleading guilty to the charge brought by OIFP, White admitted that between March 15 and June 19, 2005, she fraudulently collected $4,357 from the New Jersey Department of Labor and Workforce Development by submitting false disability claim forms. White gave the false impression that she and a co-worker were disabled and under the care of two doctors.
An investigation determined that White forged the two doctors’ names on the claim forms in support of the false disability claims. White admitted that she reported to the labor department that she was pregnant when, in fact, she was not. White also admitted that she falsely claimed her co-worker was injured in an accident on his way to work.
In pleading guilty to the charges brought by the Atlantic County Prosecutor’s Office, White admitted that she unlawfully obtained bank information of at least seven victims, and used the information to fraudulently obtain duplicate ATM and other bank cards. White admitted that she used the fraudulent cards to obtain cash and other items from various retail stores within Atlantic County.

NATIONAL NEWS ZONE......

2009-08-17T20:31:00.000-07:00

At recent kickoff meetings throughout Michigan, The Main Street America Group’s Great Lakes Casualty Insurance Company announced the availability of its commercial product line, featuring the company’s new Main Line Business Owners Policy (Main Line BOP) product, to its statewide network of independent agents.

Michigan agents were also introduced to the super regional property/casualty insurance carrier’s new Main Street Station for Commercial Lines quoting and policy issuance system, which they will use to quote and submit new commercial lines business.

Main Line BOP and Main Street Station for Commercial Lines have also been rolled out to Main Street America’s statewide network of Georgia independent agents. In the Peach State, the product will be written with the carrier’s Main Street America Assurance Company. This now marks nine states where The Main Street America Group has launched Main Line BOP in conjunction with Main Street Station for Commercial Lines.

Great Lakes Casualty, which was acquired by Main Street America last year, had previously only written private passenger auto insurance in Michigan. Earlier this year, the Grand Rapids-based carrier began offering Main Street America’s Personal Auto MVP product via its Michigan agents.

Main Street America’s Main Line BOP property and liability product for the small business owner features broad eligibility, with nearly 500 classes through these 10 programs: wholesale, retail, services, offices, apartments, contractor, condominium associations, garages, restaurants and light manufacturing.

The product also features standard BOP coverages, as well as a host of others, including two that are particularly important to small businesses today—employment practices liability insurance and identity theft. Coverage can be extended with the product’s many options, such as product withdrawal, and condominium directors and officers, as well as Main Line Extension and contractors’ inland marine endorsements.

Main Street America’s Michigan and Georgia independent agents will also be able to write commercial auto coverages, including the carrier’s Commercial Auto Elite endorsement, and workers’ compensation coverage, via Main Street Station for Commercial Lines. They will be able to write commercial umbrella via the new processing system at a later date.

Main Line BOP and Main Street Station for Commercial Lines are being rolled out on a state-by-state basis throughout the 24 states where Main Street America writes business. In addition to Michigan and Georgia, both the product and system are available in Arizona, Connecticut, Massachusetts, Nevada, North Carolina, Pennsylvania and Utah. The policy processing system is also available in Rhode Island for writing Main Street America’s commercial auto and workers’ compensation products.

INTERNATIONAL NEWS ZONE......

2009-08-17T20:25:00.000-07:00

At least 22 of the insurance and reinsurance industry's leading companies will be represented on the faculty and in the audience during the Sept. 10 legal conference titled "Reinsurance Claims & Dispute Resolution," produced by HB Litigation Conferences LLC.

Chairing the event, a nationally accredited continuing legal education program, will be Ann Field of Zurich North America, Joy Langford of Chadbourne & Parke LLP, and Elaine Lenhert of Veris Consulting LLC.

Companies represented at the event include: ACE Group; AIU Holdings; Admiral Insurance Company; Axis Capital; Chubb & Son; CNA Insurance Co.; Everest Reinsurance Company; General Reinsurance Corp.; Hannover Re; MetLife; Munich Re America; Odyssey America Reinsurance Corp.; QBE Insurance Group; Royal & Sun Alliance Insurance Company of Canada; SCOR Reinsurance Company; Swiss Reinsurance America; The Travelers Companies; United America Insurance Group; W.R. Berkley Corp.; WRM America Indemnity Co.; Zurich North America; and Zurich.

Topics include: writing and placing the reinsurance treaty and facultative contract; reinsurance considerations in finance; operational considerations surrounding reinsurance contracts for the cedent and reinsurer; emerging trends such as the financial meltdown and subprime; claims for ECO/XPL and reinsurability for punitive damages; in-house counsel expectations of outside counsel; arbitration best practices; options for resolution; and more.

Speakers include: Timothy Stalker, Nelson Levine deLuca & Horst, Blue Bell, Pa.; Christopher Kende of Cozen & O'Connor; Larry Johnson, Chairman & CEO, Veris Consulting, LLC; Kent Barrett, Senior Managing Director, Veris Consulting, LLC; Stephen Kennedy, Clyde & Co.; Myra Lobel, ARe, Guy Carpenter & Company LLC; Julie Pollack, Senior Vice President and Senior Legal Counsel, Contracts, Swiss Re America; Deborah Giss Stalker, Associate General Counsel, Global Reinsurance, ACE Group; John Cleary, Dewey & LeBoeuf LLP; Drew Spitzer, Senior Vice President & Director of Accounting Policy, ACE Ltd.; Beverly Sneddon, AVP, Reinsurance Claims & Legal, Zurich North America; David Sobotka, CPCU, ARe, Managing Director, Guy Carpenter & Company, LLC; Christopher Reichow, Vice President, PRO IS Inc.; Scott Birrell, Vice President and Associate General Counsel, Travelers; Marc Karnell, Senior Vice President, Global Claims Technical Director, Endurance Services Limited; Davie Bowers, Of Counsel, Zurich North America Legal; John Cole, Wiley Rein LLP; Debra Roberts, CFA, Debra Roberts & Associates LLC; Jonathan Rosen, CEO, The Home Insurance Company in Liquidation; David Silva, Mound Cotton Wollan & Greengrass; Jim Engel, former Chief Claim Officer of Zurich NA and ACA NA and CEO of Brandywine Holdings; Mark Gurevitz, Senior Vice President and Associate General Counsel, The Hartford; Richard March, former General Counsel of United National Insurance Company; Peter Scarpato, President, Conflict Resolved, LLC; Thomas Wamser, Associate General Counsel, ACE-INA.

For more information, visit the Conferences section at www.LitigationConferences.com, email HB at info@LitigationConferences.com, or call the company at (484) 324-2755.

EASTERN NEWS ZONE......

2009-08-17T20:19:00.000-07:00

Oneonta, New York police have arrested the owner of a home heavily damaged in a July 23 fire and accused him of setting the blaze which led to the injury of two firefighters.

Donald R. Kropp, 33, was arraigned Friday afternoon and charged with third degree arson, second degree insurance fraud, two counts of second degree assault and first degree reckless endangerment. The charges are all felonies. The two counts of assault stem from the fact that two firefighters were injured.

If he is convicted, Kropp could be sentenced to up to 15 years in prison on the most serious charges.

Kropp’s arrest followed a two-week investigation into the blaze that heavily damaged the two-story frame structure where he lived with his wife and three children.

Oneonta Fire Chief Robert Barnes said fire investigators determined the fire was incendiary in nature. One of the two firefighters who were injured while fighting the blaze, Barnes said the fire was started in a first floor room that was being used as a bedroom.

Located on Susquehanna Street, the home was insured for more than $500,000. Kropp filed an insurance claim for his losses following the fire, but the claim was never paid.

No one was home when the fire was discovered by a neighbor who contacted the fire department at approximately 5:45 p.m. An estimated 75 firefighters from Oneonta and surrounding departments fought the blaze in the two-story home.

The structure sustained significant smoke, water and fire damage. Most of the damage reportedly occurred on the first floor of the house. The structure contained an unoccupied rental apartment.

MIDWEST NEWS ZONE......

2009-08-14T13:02:00.000-07:00

The 2009 State Report Card for Workers’ Compensation ranks Iowa as the most effective system in the nation. The rankings are distributed annually by the Work-Loss Data Institute.

“Iowa is consistently recognized as having a fair and balanced system,” indicated Iowa ’s Workers’ Compensation Commissioner Christopher Godfrey. “We are committed to providing impartial assistance in education, compliance and adjudication to both businesses and workers across the state.”

The 2009 rankings were derived by scoring each state on five outcome measures: incidence rates, cases missing work, median disability duration, delayed recovery rate and a key condition of low back strain.

The Work-Loss Data Institute utilizes data provided through the U.S. Occupational Safety and Health Administration. By using standardized federal data, the Institute is able to control for data variations.

“Iowa consistently ranks among the states as having one of the lowest premium rates for Iowa employers and as having one of the highest compensation rates for pay out to workers” stated Godfrey. “The combination of all of the factors makes Iowa a great place for business growth and provides a valuable safety net for injured workers. Because of this, Iowa is frequently considered a model program and other states work to achieve our success.”

EASTERN NEWS ZONE......

2009-08-14T12:54:00.000-07:00

New Jersey Attorney General Anne Milgram and Criminal Justice Director Deborah Gramiccioni announced that a former Essex County insurance company employee pleaded guilty to conspiring to steal more than $94,100 through fraudulent disability insurance claims.

According to Acting Insurance Fraud Prosecutor Riza Dagli, LaShondrea Tucker, 32, of Plainfield, pleaded guilty in Essex County to second-degree insurance fraud, a charge contained in a Dec. 18, 2008 state grand jury indictment. A judge scheduled Tucker’s sentencing for Sept. 23. The state will recommend a sentence of five years in state prison.

Three of Tucker’s co-defendants – Erick Streeter, Louise Fedrick and Deborah Ruffin are also scheduled to be sentenced on Sept. 23. Streeter, 44, of Newark, pleaded guilty on April 6 to third-degree theft by deception. Fedrick, 40, of Irvington, pleaded guilty on April 6 to third-degree forgery. And Ruffin, 49, of Newark, pleaded guilty on June 18 to third-degree theft by deception. All of the charges were contained in the Dec. 18, 2008 state grand jury indictment.

In pleading guilty, Tucker, who was employed as a disability claims manager for Prudential Insurance Company, admitted that between Sept. 22, 2003 and March 23, 2004, she created fraudulent disability claims using the names and other identifiers of actual people enrolled in a teachers’ disability plan. Tucker admitted that she diverted 21 checks and two electronic fund transfers totaling over $94,100. Tucker admitted that she issued the diverted checks, which totaled $66,700, in the names of the insured individuals and sent them to Streeter. Streeter engaged Fedrick and Ruffin to assist him with the cashing of the claims checks. Fedrick admitted to forging the signatures on the checks for deposit.

The investigation further revealed that Tucker opened an Internet bank account with Net Bank. Two electronic fund transfers in the approximate amount of $27,400 were subsequently deposited into the Net Bank account representing fraudulent sick pay from Prudential Insurance Company.

WESTERN NEWS ZONE......

2009-08-14T12:50:00.000-07:00

California Insurance Commissioner Steve Poizner is reminding residents who have been evacuated due to the Lockheed Fire in Santa Cruz County and the La Brea Fire in Santa Barbara County that they may be eligible for reimbursement for additional living expenses due to mandatory evacuations. Poizner also encouraged all Californians to make sure their insurance policies are updated and to conduct a home inventory today.

"I urge everyone who has been evacuated from their home to check their insurance policies," said Poizner. "Many homeowners policies cover additional living expenses incurred as a result of a mandatory evacuation. Coming up with extra money for hotel stays, extra food and other additional living costs are the last thing fire evacuees should have to worry about. Check your policy, and if you have any insurance questions, call the Department of Insurance at 800-927-HELP."

For the most recent information about these fires, including containment and evacuation information, visit the CAL FIRE Web site at http://calfire.ca.gov/.

Many residential homeowners insurance policies cover what is known as ALE, or additional living expenses. This permits homeowners to maintain their normal standard of living by covering the increased living expenses incurred as a result of damage caused by the fire or a mandatory evacuation. ALE coverage typically includes extra food costs, increased housing costs, furniture rental, relocation and storage costs, telephone installation and extra transportation costs to and from school or work, after the deductible is reached.

A free home inventory guide is available on the Department of Insurance Web site at www.insurance.ca.gov, or by calling the CDI Consumer Hotline at 800-927-HELP.

SOUTHEASTERN NEWS ZONE......

2009-08-13T11:03:00.000-07:00

Florida Insurance Commissioner Kevin McCarty announced the Office of Insurance Regulation (Office) and the Hartford Financial Services Group (Hartford) have entered into a consent agreement whereby Hartford will issue refunds or credits totaling $48.2 million to Florida businesses for excess profits it earned on its workers’ compensation policies for accident years 2004, 2005 and 2006.

Hartford’s refund will bring the total amount of refunded excess workers’ comp profits for all companies workers’ comp writers in Florida to more than $98.8 million so far this year. Over $29.7 million in excess workers’ comp profits were refunded to Florida businesses in 2008.

Hartford must provide refunds or renewal credits within 60 days from the date of this order and provide documentation of its compliance to the Office.

In addition, Hartford must certify that it has attempted to locate all policyholders whose refund checks are returned; and if unable to locate those policyholders, the funds must be processed as unclaimed or abandoned property pursuant to Chapter 717, Florida Statutes. Hartford also must pay the Office $5,000 in administrative costs.

The North Carolina General Assembly has formally ended the first year of a two-year session. Legislators adjourned after significant activity on a number of insurance issues, according to the American Insurance Association (AIA).
“This was a very active session for insurers, by North Carolina standards,” said Raymond Farmer, AIA assistant vice president, Southeast Region, “and we can expect a similar level of activity in next year’s session. We are pleased overall with the session’s achievements, led by passage of HB 1305, which reforms the state Beach Plan both operationally and financially, and begins the process of returning it to a market of last resort.”
Other significant legislative activity included passage of two auto bills: SB 749, which clarifies an insured’s coverage options under the state’s UM/UIM law, and also exempts certain commercial vehicles from the law’s requirements for UM/UIM coverage; and a bill opposed by AIA, SB 660, which provides consumers with a method for claiming diminution of value in auto property damage claims.
On the driver safety front, legislators passed and the governor has signed HB 9, which bans drivers from sending text messages or e-mails while driving. Insurers also were able to defeat a number of potentially costly new tax proposals, as North Carolina legislators sought new revenues to address a budget deficit.
Proposals that would have adversely impacted insurers, including an increase in the gross premium tax to 2.25 percent, an increase in the regulatory fee from 5.5 to 6 percent, and imposing a sales tax on auto repairs, were removed from this year’s final finance and budget package.
Finally, on the litigation front, AIA was part of negotiations with the trial bar who sought to change the state’s current six-year statute of repose in product liability actions. The compromise language of SB 882, which passed, extends the statute of repose to 12 years.

NATIONAL NEWS ZONE......

2009-08-13T10:57:00.000-07:00

A new Web site from Liberty International Underwriters (LIU) reports it will help architectural and engineering firms more easily manage and protect their operations.

The site, www.ae-libertyiu.com, gives design professional firms the tools to better control their risk, lower claims against their firms, and track employee professional development activity while providing employees access to more than 1,000 approved continuing education courses.

The site’s eLearning section gives architects and engineers access to risk management courses developed exclusively by LIU as well as courses created by RedVector, a provider in online education for the design and construction industries.

The LIU courses are free of charge to policyholders and RedVector courses are available at a discounted rate – with most of the courses qualifying for continuing education credits. Any course accessed through www.ae-libertyiu.com will be tracked by the site – helping to cut down the time spent on employee training record keeping.

Policyholders who successfully complete the necessary professional development courses through the site may qualify for a loss prevention credit at renewal.

A demo of the site is available at www.liu-aewebdemo.com.

WESTERN NEWS ZONE......

2009-08-13T10:43:00.000-07:00

The WCIRB (wcirbonline.org/wcirb) said it is submitting a filing to the California Department of Insurance (CDI) recommending an approximate 22.8 percent increase in pure premium rates (or "claims cost benchmark") effective Jan. 1, 2010. The WCIRB Governing Committee made its decision to recommend the increase based on recommendations heard at the WCIRB Actuarial Committee on July 31.

The recommendation is based on a pair of principal components. First, the WCIRB's evaluation of March 31, 2009 loss experience produces an indicated increase in the claims cost benchmark of 16 percent. This indicated increase is primarily the result of increased medical costs.

Second, the WCIRB's analysis of anticipated cost increases stemming from three recent Workers' Compensation Appeals Board decisions (Ogilvie v. City and County of San Francisco, Almaraz v. Environmental Recovery Services and Guzman v. Milpitas Unified School District) indicates an additional increase of 5.8 percent.

The WCIRB says that if the full 22.8 percent increase is approved by the Insurance Commissioner, the Jan. 1, 2010 pure premium rates will still be, on average, 55 percent lower than the approved pure premium rates in effect July 1, 2003.

The WCIRB added it expects to submit its pure premium rate filing to the CDI on or around Aug. 18.

Five California friends were arrested and charged with staging an auto collision and then fraudulently filing an insurance claim with Infinity Insurance Company (Infinity) and State Farm Mutual Automobile Insurance Company (State Farm).
Phuong Nguyen, 29, and David Pham, 71, both of Westminster, and husband and wife, Hoai Nguyen, 57, and Tracy Nguyen, 50, both of Huntington Beach, are all charged with three felony counts of insurance fraud and two felony counts of grand theft. If convicted on all charges, the four defendants face a maximum sentence of five years in state prison each. Tony Nguyen, 53, Westminster, is charged with three felony counts of insurance fraud, two felony counts of grand theft, and one felony count of false and fraudulent claim. If convicted on all charges, he faces a maximum sentence of eight years in state prison.
At approximately 10:30 p.m. on June 13, 2008, Tony Nguyen is accused of driving a 1995 Nissan sedan with Phuong Nguyen in the passenger seat. He is accused of pulling out in front of a 1990 Nissan Maxima occupied by driver Tracy Nguyen, her husband Hoai Nguyen, and friend David Pham in the back seat. Tony Nguyen is accused of sideswiping the Maxima at the intersection of Brookhurst Street and Larson Avenue in Garden Grove. They are accused of pulling over and exchanging information. No medical personnel or police were called to the scene. Tony Nguyen is accused of referring the four co-defendants to the Law Offices of Walter Martinez and the Law Office of Tung T. Pham. On June 16, 2008, all five defendants are accused of filing an insurance claim for bodily injury and vehicle damage with Infinity and State Farm totaling over $60,000.
On June 30, 2008, during a recorded statement to Infinity, the five defendants are accused of stating that they did not know the occupants in the other vehicle before the collision. On July 11, 2008, during another recorded statement taken by Infinity, Tracy Nguyen, Hoai Nguyen, and David Pham are accused of stating that they didn’t know the driver or the passenger in the car that hit them. On July 22, 2008, during a recorded statement taken by Infinity, Phuong Nguyen is accused of stating that she didn’t know the three people that were in the car that was hit. In July 2008, the Department of Insurance began an investigation into the case at Infinity’s request.
During the time of the accident, all five defendants are accused of knowing each other and living together at various times in a Huntington Beach house owned by Hoai and Tracy Nguyen.
In August and October of 2008, the five defendants are accused of receiving money from Infinity and State Farm totaling over $3,200 in collision claims.

TOP NEWS ZONE......

2009-08-12T15:46:00.000-07:00

Driving without car insurance nationwide is getting riskier.

Across the nation, police are setting up insurance checkpoints at intersections, highway entrances and other well-traveled areas in an effort to crack down on uninsured drivers.

Similar to sobriety checkpoints, these checks require drivers to provide proof of car insurance along with a valid vehicle registration and driver's license. And drivers in many areas of the country are already beginning to feel the effects.

William Mecke, communications director for the Georgia Regional Transportation Authority, has been stopped at insurance checkpoints on several occasions. One costly encounter in Atlanta, Ga., stands out in his memory.

"I remember that time because I did not have a current insurance card with me," he explained. "I had four or five older ones, but not the current one."

The police officer ran Mecke's information through an electronic database and, even though it showed he was currently insured, he received a $42 ticket for failing to produce an insurance card.

As the number of unemployed Americans rises, so does the number of uninsured motorists. But strict enforcement laws have yet to keep millions of motorists from hitting the roadways uninsured. Currently, one in seven motorists drives without car insurance -- nearly 15% of all drivers nationwide. By next year, the level of uninsured motorists could reach record highs.

For those caught driving without car insurance, the penalties are steep. Offenders could face vehicle seizure, license suspension, fees, misdemeanor charges and jail time. Additionally, uninsured drivers may be considered 'high-risk' by insurance companies and charged hundreds more per year -- or rejected outright -- the next time they apply for a policy.

The bottom line: If a consumer is struggling to pay his or her insurance premium, it's better to find ways to reduce the cost of the policy than to let it lapse or cancel it altogether.

NATIONAL NEWS ZONE......

2009-08-12T15:36:00.000-07:00

Mitratech, a provider of collaborative accountability and legal operations management software, has expanded the scope of its Insurance Claims Litigation Solution Framework.

The framework, based on the TeamConnect platform, has been in use at major insurers for more than 20 years. The new edition includes upgraded capabilities for litigation trend analysis and fraud detection.

TeamConnect's Insurance Claims Litigation Solution Framework is designed to provide claims managers with accurate, real time data on how claims are being litigated across a large claims organization. This practical intelligence about claims enables improved productivity for the claims department, which contributes to an improved expense ratio for the carrier. By helping staff attorneys gain a better understanding of effective claims defense practices, as well as detecting fraud, the framework helps narrow the carrier's loss ratio.

For more information, visit www.mitratech.com.

Philadelphia Insurance Companies (PHLY) has recently rolled out two new products, Pest Control and Security Services "The Guardian.
Pest control eligible classes include operators specializing in residential, commercial, and industrial buildings who have a minimum of four years in the industry and a workforce of less than 50 employees. Security Service eligible classes include armed and unarmed security services, alarm monitoring and installation services, security consultants, armored car services and personal security for executives.
To locate the office nearest you or for more information, visit www.phly.com or contact Marisa Thornton at (610) 538-2260.

EASTERN NEWS ZONE......

2009-08-11T15:00:00.000-07:00

The American Insurance Association (AIA) applauded Monday's decision by the Appellate Division of the New Jersey Superior Court to uphold the new Personal Injury Protection (PIP) Automobile Medical Fee Schedule rules that were to go into effect on Oct. 1, 2009.

The medical fee schedule is used to reimburse medical providers for the treatment of automobile accident injuries.

“The Court, as it has done in the past, has largely affirmed the Department of Banking and Insurance’s efforts to reduce costs for New Jersey auto insurance consumers,” said David Snyder, AIA Vice President and Associate General Counsel of Public Policy. “We have supported these efforts against the incessant attacks of interest groups. Containing costs, as the legislature has directed, is fundamental to maintaining New Jersey's much improved auto insurance system."

The case arose when certain medical providers filed a lawsuit challenging the Department's fee schedule regulations. The Court granted a stay of the implementation of the rules pending its review. AIA intervened as a party in the matter supporting the Department by arguing that the new PIP medical fee schedule is an essential cost-control measure that is both authorized and consistent with the statutory mandate to control PIP medical costs.

“The PIP medical fee schedule has been delayed far too long and the Department’s efforts to implement these new regulations will vastly improve the efficiency of the overall claims handling process,” concluded Snyder.

AIA member companies write nearly 25 percent of the entire property/casualty market in New Jersey.

SOUTHEASTERN NEWS ZONE......

2009-08-11T14:44:00.000-07:00

North Carolina Insurance Commissioner Wayne Goodwin announced the distribution of $6.5 million to 661 former members of the Phoenix Fund Inc.

The Phoenix Fund was ordered into rehabilitation in October 2006, by the Wake County Superior Court after the N.C. Department of Insurance uncovered a more than $20 million fraudulent reinsurance scheme and left several insurance entities, including the Phoenix Fund, without reinsurance.

Since the Phoenix Fund has been under rehabilitation, the Department has sought and recovered nearly $18 million for the Phoenix Fund from Thomas G. Reitz, the Fund's purported reinsurance broker who was at the center of the fraudulent reinsurance scheme. In 2007, Reitz pleaded guilty to mail fraud and money laundering and was sentenced in 2008 to 70 months in jail followed by three years of supervised release. In addition, Reitz was ordered to pay over $19 million in restitution to the Phoenix Fund.

Distribution checks will be mailed to employers that were participating members of the Phoenix Fund as of Oct. 17, 2006, the date the Court ordered the Phoenix Fund into rehabilitation. The remaining recovered monies will be used to pay the Fund's obligations. Any monies remaining after the payment of such obligations will be returned to the same former members in a second and final distribution upon approval of the Court.

The Phoenix Fund was a self-insured group workers' compensation fund whose members agreed to pool their workers' comp liabilities rather than seeking coverage in the private market. Self-insured group workers' comp funds are licensed and regulated by the North Carolina Department of Insurance.

MIDWEST NEWS ZONE......

2009-08-11T14:37:00.000-07:00

Ohio Department of Insurance Director Mary Jo Hudson announced the Professional Education Corporation (P.E.C.), located in Hamilton, Ohio, no longer has authority to conduct pre-licensing and continuing education classes for Ohio insurance applicants and agents.

As the result of a Departmental Enforcement investigation, George Armstrong, owner of P.E.C., agreed to the revocation of his education provider contract and voluntarily agreed to surrender his Ohio insurance licenses.

A Department investigation revealed from 2006 to 2008, Armstrong reportedly provided hundreds of insurance agents with bogus continuing education credits and false certificates of completion for classes they never took. As part of his scheme, Armstrong established the “Friends of George” program where, for a fee, he would provide an agent with educational credits.

As all education providers are required to maintain specific documentation for classes taught, Armstrong would reportedly arrange for those insurance agents interested in his scheme to meet at a central location and complete the necessary paperwork required. In addition to insurance agents signing a class roster, he would pass out proficiency tests and provide individuals with the answer pattern created so it would appear all class participants successfully passed the course. Armstrong would then provide insurance agents with course completion certificates to show they successfully completed a certain number of hours of continuing education.

Upon conducting an undercover operation at one of his courses, Department investigators witnessed Armstrong’s scheme first hand. Insurance agents who had taken his courses over the years were later interviewed and confirmed what the Department had suspected. Armstrong admitted that all allegations brought against him were true, and agreed to the permanent surrender of his insurance license and pre-licensing and continuing education contracts.

As Ohio insurance agents are required to take 20 hours of continuing education every two years, insurance agents who took continuing education courses from Armstrong / P.E.C. could be required to take additional continuing education in the near future as credits submitted by Armstrong from 2006 through 2008 may be deemed null and void. Those agents may additionally face administrative action being taken against their license as they failed to complete continuing education as required, and engaged in a fraudulent and dishonest practice.

Insurance agents impacted will be notified by mail of any administrative action they may face.

NATIONAL NEWS ZONE......

2009-08-11T14:28:00.000-07:00

Lexington Insurance Company, a Chartis company, announced the introduction of Upgrade to Green^® – Builder’s Risk, which provides coverage that supports green building construction and renovation projects registered with the LEED^® or the GREEN GLOBES^® rating systems.

Upgrade to Green, available as an endorsement to Lexington’s Completed Value Builder’s Risk Policy, extends coverage to address the risks green buildings face during three key areas of construction: project management and administration, site ecological impacts, and consumption of resources.

In the event of a covered loss to a green building, Upgrade to Green provides coverage for the fees of qualified professionals associated with the building’s design and restoration, as well as the costs of re-commissioning building systems and replacing vegetative roofs. Additionally, the product responds to changes to the relevant rating system criteria or loss of anticipated rating points as a result of a covered loss.

For example, Upgrade to Green provides coverage if the new rating criteria require more points to achieve the anticipated certification level, or if the criteria to achieve the same number of points are more stringent and costly. It also provides extra remuneration for reconstruction or rework to secure new rating points if, as a result of covered damage, anticipated rating points are lost and no longer available.

For more information regarding Upgrade to Green, contact Liz Carmody at (617) 772-4597 or liz.carmody@chartisinsurance.com, or visit www.lexingtoninsurance.com/property.

EASTERN NEWS ZONE......

2009-08-10T18:19:00.001-07:00

A Utica, New York man who fraudulently collected $18,600 in workers’ compensation benefits while working as a handyman was arrested Aug. 4, the New York State Insurance Department reported.

Amir Tricic, 41, was arrested after an investigation by John Toucher of the Insurance Department’s Frauds Bureau. The investigation revealed that Tricic was employed as a cable technician at a cable manufacturing plant when he was injured. Later, while working as a handyman, he collected benefits at the same time he claimed the job-related injury prevented him from working.

Tricic is accused of violating the state Workers’ Compensation Law and could be sentenced to four years in prison if he is found guilty. A hearing will be held in Utica City Court.

WESTERN NEWS ZONE......

2009-08-10T11:17:00.000-07:00

California Insurance Commissioner Steve Poizner announced the arrests of Melody Ann Mosqueda, 45, of Valley Springs, her former husband, Anthony Charles Mosqueda, 52, of Stockton and their daughter, Rachel Lee Anthony-Mosqueda, 28, of Elk Grove. The family was arrested as the result of an investigation conducted by the California Department of Insurance (CDI) into alleged insurance fraud.

Melody Ann Mosqueda, a former insurance claims adjuster, was arrested as she appeared at the San Joaquin County Superior Court in Lodi, California on an unrelated criminal matter; she is charged with 13 counts of insurance fraud, money laundering, grand theft and burglary. Rachel Lee Anthony-Mosqueda was arrested by the Elk Grove Police Department; she is charged with nine counts of insurance fraud, money laundering and grand theft. Anthony Charles Mosqueda was arrested at his residence; he faces 10 counts of insurance fraud, money laundering and grand theft.

CDI's investigation was assisted by Zurich and Fireman's' Fund insurance companies. Bail for each family member was set at $250,000. The case is being prosecuted by the San Joaquin County District Attorney's Office.

CDI was alerted to the Mosqueda family's alleged scheme when workers from both Zurich and Fireman's Fund insurance companies independently discovered discrepancies in a claim Melody Ann Mosqueda had handled for their companies. Both companies conducted internal audits and discovered multiple discrepancies in multiple claims.

According to CDI detectives, Melody Ann Mosqueda perpetrated an embezzlement scheme while working for Zurich and Fireman's' Fund insurance companies as an insurance claims adjuster from 2003 to 2007 by allegedly inputting false information into legitimate insurance claims, then issuing payment for fictitious settlements and/or services.

It is further alleged that these checks were issued to and cashed by Mosqueda and her family members. The Mosqueda family also apparently created several bogus companies to which Melody Ann would then issue insurance payments and subsequently cash those checks.

CDI uncovered that Mosqueda actually had created and diverted checks totaling more than $175,000, but some check remained not cashed.

Ventura County (Calif.) District Attorney Gregory Totten announced that Ismael Santos (DOB 11/20/84) of Thousand Oaks, pled guilty to one count of felony auto insurance fraud. Santos will be sentenced on Sept. 2, in Ventura County Superior Court. He faces a maximum sentence of five years in state prison and a $50,000 fine.
On March 12, 2009, Santos reportedly contacted the Thousand Oaks Police Department and reported his 2000 Ford Expedition stolen from a shopping center parking lot. Santos stated he had parked his vehicle in the lot and discovered it gone when he returned from shopping. On March 13, Santos contacted his insurance carrier, Access General, and filed a claim for the loss. Later that same day, Access General was notified by the National Insurance Crime Bureau that a 2000 Ford Expedition registered to Santos was impounded in Tijuana, Mexico, on March 9.
Access General referred the claim to the California Department of Insurance (CDI) for investigation. When CDI investigators questioned Santos, he repeated his story about his vehicle being stolen.
However, when investigators confronted him with the information about the vehicle being impounded, Santos admitted that he paid two men $500 to “get rid” of his vehicle because he could no longer afford the monthly payments.

NATIONAL NEWS ZONE......

2009-08-10T11:08:00.000-07:00

The Insurance Educational Association (IEA), a provider of professional education, announced its Fall Semester Curriculum for the working professional in the insurance, risk management, disability and related industries.

Nearly 2,700 students are expected to increase their skills and receive industry accreditation through IEA's Fall Semester classes, which begin on Aug. 24.

New for the Fall Semester is a suite of online self-study courses. These courses, first introduced on a limited basis earlier this year, enable students to learn when and where they want. In addition, they allow study at a reduced cost to students and their employers. This more efficient delivery model is especially relevant in today's economic environment.

For further information on specific classes, visit: www.ieatraining.com.

SOUTHWESTERN NEWS ZONE......

2009-08-10T11:03:00.000-07:00

Louisiana Retailers Mutual Insurance Company, a workers' compensation insurer, announced that the company has received all regulatory approvals from the Arkansas, Louisiana and Mississippi departments of insurance to convert to a mutual insurance holding company system, consisting of Retailers Casualty Mutual Holding Company and its wholly-owned subsidiary, Retailers Casualty Insurance Company.

Retailers Casualty Mutual Holding Company will continue to provide workers' comp insurance coverage through its subsidiary Retailers Casualty Insurance Company, a stock insurance company. This change is effective retroactively Jan. 1, 2009.

Retailers Casualty insures more than 2,000 businesses throughout Arkansas, Louisiana and Mississippi, and is rated A- (Excellent) by A.M. Best Company. Retailers Casualty is managed by Summit. Summit has more than 30 years of experience in workers' comp and provides underwriting, policy administration, claims management and loss control services to Retailers Casualty policyholders.

SOUTHEASTERN NEWS ZONE......

2009-08-10T10:59:00.000-07:00

Sawgrass Mutual Insurance Company announced that it is now open for business.

Sawgrass Mutual is now providing residential property insurance coverage to Florida homeowners through a network of professional, independent agents located throughout the Sunshine State.

Sawgrass Mutual insurance will cover homes and structures physically attached to homes; detached structures such as pools, fences and sheds; and personal property including clothes, furniture and appliances and Scheduled Personal Property such as special Jewelry and Fine Arts items. Additional benefits include competitive pricing, convenient payment plans, and some additional coverage options to provide the policyholder the ability to tailor coverage through their agent to meet their individual needs.

Sawgrass Mutual Insurance Company is headquartered in Davie, Florida. For additional information call Bob Sammons at (877) 853-4336 or visit www.SawgrassMutual.com.

EASTERN NEWS ZONE......

2009-08-06T23:01:00.000-07:00

New York Gov. David Paterson announced that $13.6 million was recovered from insurance companies between April 1 and June 30, 2009, for almost 3,000 consumers and health care providers who filed complaints with the New York State Insurance Department. This is up from $8.5 million recovered in the first quarter of 2009, for a total of $22 million for the first half of the year.

“With so many affected by the economic downturn, we will continue to work to make sure New Yorkers get full value for their insurance dollars,” said Gov. Paterson. “Insurance is a promise to protect us at our most vulnerable, and New Yorkers can rely on us to protect them if insurance companies do not keep their promises.”

Acting Insurance Superintendent Kermitt Brooks added, “Governor Paterson’s commitment to consumers is one shared by the Insurance Department and we will continue to work to make sure they are treated fairly. If you have a problem with an insurance company, let us know. In these difficult times, every New Yorker should know they have some place to turn for insurance help.”

WESTERN NEWS ZONE......

2009-08-06T22:54:00.000-07:00

California Insurance Commissioner Steve Poizner announced a $500,000 a settlement agreement with Conseco Senior Health Insurance Company over its unfair claims handling practices on long term care insurance policies.

Conseco Senior Health Insurance Company, which is under new management and is now called the Senior Health Insurance Company of Pennsylvania, had been the subject of numerous consumer complaints to the Department which discovered that Conseco was improperly denying claims on long term care policies and that its claims handling practices were confusing and onerous. The average age of Conseco Senior's policyholders is 80.

In response to numerous complaints, the Commissioner conducted an on-site market conduct examination that uncovered additional poor claims handling practices that violated California law, and uncovered coverage denials that were based on a misreading of federal law.

The Commissioner also determined that Conseco Senior was misapplying the terms of its policies and was denying benefits.

Under the settlement agreement, Conseco Senior will pay a $500,000 penalty and will retroactively readjust certain policyholder claims back to Jan. 1, 2004, which will be paid with interest.

MIDWESTERN NEWS ZONE......

2009-08-06T22:50:00.000-07:00

AAA Chicago is applauding Gov. Quinn and Illinois legislators for their commitment to keep Illinois roads safe by passing HB0071 into law, which bans text messaging while driving for all drivers. With the passage of this bill into law, Illinois joins 13 other states and the District of Columbia to expressly prohibit texting while driving for all drivers.

“There are no two ways about it, texting takes your eyes off the road, your hands off the wheel and your mind off driving, which is a potent combination on the road,” said Brad Roeber, president of AAA Chicago. “We’re proud that Illinois continues to advocate for safe roads through the passage of this law.”

According to AAA Chicago, the data on texting while driving is clear.

A recent study by the National Highway Traffic Safety Administration and the Virginia Tech Transportation Institute found that 80 percent of crashes and 65 percent of near-crashes involve some type of driver distraction. According to the study, cell phone use – including texting – was one of the principal distractions that led to crashes.

The law carries the support of AAA members as well. A 2008 survey of AAA members across Illinois found that 92 percent of respondents support a law that bans texting while driving for all members. Furthermore, in the same survey, distracted driving was AAA members’ second biggest traffic safety concern, second only to drunk driving.

SOUTHEASTERN NEWS ZONE......

2009-08-06T22:46:00.000-07:00

Explorer Insurance, an auto carrier and member company of ICW Group Insurance Companies, is launching expanded Florida coverage options, in many cases with lower premiums.

The new changes give Florida’s independent agents the ability to reportedly offer reduced rates and a wider range of coverage options, in order to meet the needs of their customers throughout the state.

The Explorer Universal program allows agents to write policies with increased flexibility, including $10,000/$20,000 Bodily Injury limits and Property Damage coverage of $25,000. Explorer will also insure drivers with up to three accidents or major violations. In addition, Explorer can now write a policy for a driver who requires a Financial Responsibility filing, even if the policy has an excluded licensed driver.

Explorer Universal offers its most competitive rates in Florida’s high-growth cities including Orlando, Tampa, Jacksonville and Tallahassee with the greatest decreases available for drivers with one or two points, single drivers and drivers with international licenses. Part-time students are eligible for the good student discount and the reduced married rate can be applied for widows. Additional discounts include homeowners, multi-car and renewal.

In addition to expanded coverage, Explorer provides motor vehicle reports and CLUE auto insurance loss histories to agents at no cost and offers agents writing its Universal product a special 50% commission incentive on sales of optional Nation Safe Driver Coverage (NSD) for roadside assistance, available with both full coverage and liability only coverage.

EASTERN NEWS ZONE......

2009-08-05T19:41:00.000-07:00

New York State Insurance Fund Executive Director James Wrynn announced the release of the Fund’s 2008 annual report, available through the Fund’s Web site at nysif.com.

The report can be downloaded at nysif.com under the “About NYSIF” tab. Visitors can access the full report, or a smaller file containing just the financial statement, both in .pdf format.

The 2008 report indicates that NYSIF, created in 1914, continues to fulfill its mission by “lowering the cost of workers’ compensation insurance for businesses and the consuming public,” and “ensuring the existence of a stable market…in New York State as an industry leader in price, quality and service.”

NYSIF, which began its 95th year of service on July 1, reported $1.36 billion and $17 million, respectively, in workers’ comp and disability benefits insurance premium in 2008. In the report, Wrynn’s message to stakeholders says NYSIF continues to maintain “a guaranteed market for employers, ensuring a healthy measure of competition among workers’ compensation and disability benefits carriers in New York.”

A non-profit organization created by the New York State Legislature, NYSIF consists of two separate funds: the Workers’ Compensation Fund, created in 1914, to insure employers against occupational injury or illness suffered by their employees, and the Disability Benefits Fund, established in 1949, to cover employee injury or illness off the job.

The report shows that in 2008 NYSIF paid $177.4 million in dividends to workers’ comp policyholders, and another $7 million in dividend or premium credits to disability benefits policyholders. The report highlights NYSIF efforts in customer service, claims case management, safety services and e-commerce. It also reported an estimated saving s of $20.7 million as a result of NYSIF’s anti-fraud program.

In an effort to cut printing costs, Wrynn said, NYSIF will offer fewer hard-bound print copies of the 2008 report.

The report is available at the following link http://ww3.nysif.com/nysifmedia/pdf/annualreport/08annualreportnysifrd.pdf .

NATIONAL NEWS ZONE......

2009-08-05T19:28:00.000-07:00

A.M. Best Co. has released the latest installment of the Insurance Law Podcast, a series that examines timely insurance issues from an attorney’s point of view.

The latest episode features attorneys Jack Luks and Tony Petrillo from the law firm of Luks, Santaniello, Perez, Petrillo, Gold & James in Florida.

Luks and Petrillo discuss negligent security issues related to terrorist attacks in shopping centers. Even when diligent security measures are undertaken, courts and jurors have held companies responsible for third-party criminal acts, and this continues to be an area of concern.

Listen or subscribe to the Insurance Law Podcast at http://feeds.feedburner.com/InsuranceLaw.

Zurich North America Commercial's Zurich Integrated Products unit (ZIP) has introduced a new prequalification tool for producers. Z Fit™ is an online resource that reportedly makes it faster and easier for producers to determine if ZIP offers the right insurance solution for their clients' business needs.
Z Fit is a password protected tool that is accessible through ZIP's Web site 24 hours a day, seven days a week. All producers have to do is log on, answer a few basic questions about their customers' business and insurance coverage needs, and within minutes, Z Fit will indicate whether the submission fits the requirements for ZIP's risk categories.
Z Fit is available for all ZIP products, including automobile, general liability, property, umbrella, excess, workers' compensation, directors & officers, errors & omissions, employment practices liability, crime, accident & health and environmental.
Zurich launched its ZIP unit in April, 2008 to fill a commercial insurance need for businesses generating between $5 million and $25 million in annual revenues.

Life Settlement Review announced the results of their new industry survey.
The online survey, convened over a period of one month, found that 43% of participants claimed that new legal/regulatory restrictions had caused them to stop doing business in one or more states. Fifty percent of those who had stopped doing business in at least one state named "bonds or other licensing provisions" as the reason for their actions.
North Dakota, West Virginia and Vermont were the most frequently named states where laws/regulations had shut down life settlement businesses. All three states passed bans on settlements in the first five years that a life insurance policy is in force. North Dakota and West Virginia both require life settlement providers to carry a surety bond. Starting on Oct. 1, 2009, Vermont will limit brokers from earning more than 2% of the amount paid by a life settlement company to the policy owner.
Survey respondents cited a lack of capital (47% of responses) as the biggest threat currently facing the life settlement industry. Lack of capital was followed by "unreliable mortality estimates" (16%), "negative media reports" (11%), "fraudulent activity by industry actors" (10%) and finally, "negative state regulatory environment" (9%).
The survey results will be published in the August issue of Life Settlement Review, which features interviews with industry leaders and editorial commentary by life settlement experts. The survey was conducted in conjunction with the Life Insurance Settlement Association (LISA).
The survey was conducted with 117 participants who were polled from a combination of Life Settlement Review readers and LISA members. Additional results of the survey include:
* Roughly 71% of respondents told Life Settlement Review that "the amount of value they bring to a transaction" should most determine the amount of commission that a life settlement broker receives on a transaction.
* Fifty-two percent reported that "regulatory controls" will be the next major challenge facing the life settlement industry as it grows.
* An average of 82% cited "lack of basic awareness of the option" as the top reason why more consumers do not avail themselves of the settlement option. On average, only 13% cited the notion that "economics do not work for particular situations" as the main reason.

WESTERN NEWS ZONE......

2009-08-04T19:25:00.000-07:00

California Insurance Commissioner Steve Poizner announced the arrest of a Milpitas man for alleged workers' compensation insurance fraud.

Antone Costa Rita, Jr., 58, was apprehended on July 31 at his residence as the result of an investigation conducted by the California Department of Insurance (CDI). He was charged with presenting a false or fraudulent insurance claim and making false or fraudulent statements to his employer and to his treating physicians.

On Nov 19, 2002, Rita filed a workers' comp insurance claim with his employer, the City of Menlo Park, alleging that on Oct 24, 2002 he "rolled" his left ankle while painting lines at a tennis court in a city-owned park.

Over a five-year period ending Oct 24, 2007, Rita told his treating and evaluating doctors that he was unemployed, that his injury continued to worsen, and that he either could not walk or walked with great difficulty, pain and limping, even after having surgery to repair the injury. Rita also made similar statements while under oath to an attorney representing Menlo Park during a Nov 16, 2005, deposition.

However, undercover surveillance videotape taken on various dates throughout 2006 by a private investigation firm for Menlo Park captured Rita walking normally and bearing weight on his left ankle with no indications of pain. The private investigation firm also videoed Rita involved in activities that appeared to be work-related at a San Jose auto repair shop.

CDI's investigation revealed that Rita made inconsistent statements and material misrepresentations regarding the severity of his industrial injury and his employment status during appointments with physicians treating and/or evaluating him. CDI also found these inconsistencies in Rita's sworn testimony while under oath in a deposition for the purpose of filing a false workers' compensation insurance claim with, and receiving reparation from, Menlo Park via the city's third party administrator (TPA), Innovative Claims Solutions (ICS).

The alleged fraud cost Menlo Park, via its TPA, nearly $170,000. As a result of Rita's material misrepresentations, ICS paid out more than $38,200 in indemnity benefits, $23,300 in temporary total disability benefits, $14,800 in permanent disability benefits, $38,500 in medical treatment, $3,600 in vocational rehabilitation benefits, and $50,400 in legal expenses, including defense costs and surveillance/investigation.

SOUTHEASTERN NEWS ZONE......

2009-08-04T19:19:00.000-07:00

Because of flood damage at Jefferson Community College, the Kentucky Department of Insurance has cancelled Insurance Agent and Insurance Adjuster Examinations for the rest of this week.

The testing site is at 101 West Broadway in Louisville.

Insurance agents and adjusters can visit the Department of Insurance Web site – http://doi.ppr.ky.gov/kentucky/ – to reschedule. Click on eServices in the upper right-hand corner of the Web page to cancel this week’s session and to reschedule.

For additional information, agents and adjusters can phone the department’s Division of Agent Licensing at (502) 564-6001.

PEOPLE IN THE NEWS ZONE......

2009-08-04T19:12:00.000-07:00

Munich Re America announced that John Vasturia has been named president of the Regional Clients business unit. Vasturia will also continue serving as head of Facultative Certificate, a position which he has held since April 2009.

In addition to his most recent role as head of Facultative Certificate, Vasturia has held a number of key management positions in the 20-plus years he has worked at Munich Re America.

The Hartford Financial Services Group Inc. announced that Robert Ingram has been named senior vice president and chief information officer (CIO) of its property and casualty operations’ information technology (IT) organization.
Ingram will report to Brian O’Connell, The Hartford’s enterprise CIO.

EASTERN NEWS ZONE......

2009-08-04T19:08:00.000-07:00

Medical payments per workers’ compensation claim in Massachusetts were the lowest of 14 states, despite steady increases since 2001, according to a new study from the Workers Compensation Research Institute (WCRI).

The study, CompScope^TM Medical Benchmarks for Massachusetts, 9th Edition, reported that employers in Massachusetts paid an average of just over $5,100 for 2006 claims with experience through March 2007.

A key driver of the lower medical payments was the lower prices paid for nonsurgical services, which were related to the lowest non-hospital provider fee schedule in the nation, according to Cambridge, Mass.-based WCRI.

Despite lower-than-typical fee schedule rates for all service categories including surgery, the study found that prices paid for surgeries were higher in Massachusetts compared to other study states. Massachusetts employers and insurers often negotiated surgery prices higher than what the fee schedule dictated, particularly for orthopedic surgeries.

WCRI observed that recent regulations in the form of fee schedule changes that became effective April 1, 2009, focused on this issue. Fees for many surgical procedures were increased to reflect current rates being paid, raising fees in some cases two to three times above the 2004 fee schedule rates.

Another provision of the revised fee schedule increased physician fees by 10 to 20 percent, except for anesthesia and surgery, which were the subject of larger increases. At the same time, hospital reimbursement rates were generally decreased.

The study found that medical payments per claim in Massachusetts were lower for nearly all providers—both non-hospital and hospital—compared to the typical study state.

For example, payments to physicians were 42 percent lower than the median of the 14 states, mainly due to fewer physician visits and fewer services per visit. Utilization for non-hospital providers in Massachusetts was the lowest among the study states.

In addition, fewer claims received specialty services, such as minor radiology and physical medicine from non-hospital providers. Conversely, these services (and evaluation and management) were provided more often in a hospital outpatient setting in Massachusetts than in the typical study state.

Payments per claim for hospital outpatient services in Massachusetts were about half the amount paid in the typical study state. The lower payments per claim for hospital outpatient services may be partially due to the fact that a higher percentage of general outpatient care was billed by hospitals in Massachusetts compared to other study states, services that would likely be billed as non-hospital services in other states. As a result, the mix of services provided in the hospital outpatient setting was less intense in Massachusetts than in the typical study state.

The lower payments per service for hospital outpatient services are likely due to the fact that the provider fee schedule applies to hospital outpatient services when it is determined that the service can be safely provided outside the hospital setting. Hospital inpatient payments per claim were lower than typical of the study states, and a lower percentage of cases involved an inpatient stay.

The study also found that medical payments per claim in Massachusetts have been steadily increasing—9 to 12 percent per year from 2001 to 2005 and at a slightly slower rate, 7 percent, in 2006 for claims with 12 months of experience.

In 2006, payments per claim to nonhospital providers were stable or falling, due mainly to fewer visits per claim; prices paid were stable. The payments per claim for hospital outpatient services had moderate growth since 2004, mainly driven by increases in payments per service for hospital outpatient services.

To order this report, go to the WCRI Web site: www.wcrinet.org.

MIDWEST NEWS ZONE......

2009-08-03T20:53:00.000-07:00

The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors continues to enhance the agency’s rate reform efforts.

The Board has voted to further strengthen the requirements for group sponsors, those associations that provide services to employers who qualify for group discounts. The new requirements will give BWC greater opportunities to ensure sponsor associations and their affiliates are marketing their services accurately and responsibly.

Certification requirements will apply to the marketing methodologies of all sponsoring associations and their affiliates. Actions that could lead to revocation of certification include:

Instructing prospective employers to provide false information on forms;
Claiming the sponsoring association, affiliation or representative is endorsed by BWC; or
Offering discounts or refunds that are unattainable.

BWC may apply the following sanctions if these rules are violated:

Revoke certification of a sponsoring association; and/or
Prohibit the addition of new participants to the sponsor’s group.

Additionally, the Board has announced its next public forum will be held on Thursday, Aug. 27, 2009. The forum will provide injured workers, business owners, medical providers, stakeholders and other interested parties with the opportunity to address members of the board of directors on any issue. Participants are encouraged to address issues related to: claim management; cost avoidance/cost reduction opportunities; suggestions for more responsive customer service; or resources we should provide for better service.

The forum will be held from 9:30 to 11:30 a.m. on Thursday, Aug. 27, in the auditorium of the William Green Building, located at 30 W. Spring St., Columbus.

Those interested in addressing the board at the public forum are encouraged to pre-register by 5 p.m. Monday, Aug. 17. Registration forms are available online at ohiobwc.com. On-site registration will also be accepted. Speakers will be registered on a first-come, first-served basis.

EASTERN NEWS ZONE......

2009-08-03T20:49:00.000-07:00

The New York State Insurance Department will hold a public hearing on Aug. 6 in Buffalo on practices related to the sale of increasingly complex life insurance and annuity products, particularly to seniors.

The hearing will focus on suitability – whether a particular product is the right one for an individual consumer based on the consumer’s financial status, investment objectives, tax implications and other relevant information – of life insurance and annuity sales in New York State. At the hearing, the Department will try to find out if there is a problem concerning unsuitable sales of life insurance and annuities in New York, and if so, what should be done about it.

WHERE:

Buffalo & Erie County Public Library
Mason O. Damon Auditorium
Lafayette Square
Buffalo N.Y.

WHEN: Thursday, Aug. 6. The hearing will begin at 10 a.m. and continue until 5 p.m. or until testimony is complete, whichever comes first.

WEBCAST: The hearing will be webcast live at www.totalwebcasting.com/live/nysins.

NATIONAL NEWS ZONE......

2009-08-03T20:44:00.000-07:00

Failed office romances can lead to more than hard feelings; they can also trigger insurance claims. In its August issue, Best’s Review magazine’s cover story, “Love, Labor, Losses,” reports how claims involving office romances are difficult to prove but can ultimately be costly for insurers.

If a supervisor is involved with a subordinate, the severity of the claim goes up as does the payout, said Melissa Mattioli, employment practices liability vice president for Liberty International Underwriters.

A failed relationship alone would typically not be enough to trigger coverage. Claims made under an employment practices liability policy must result from some sort of wrongful employment act that is tantamount to employment discrimination, harassment, a hostile workplace or some retaliatory action, said Catherine Padalino, vice president and employment practices liability product manager for Chubb.

“Love, Labor, Losses” also provides insight into one of the latest office romance loss mitigation methods—love contracts. Experts detail the legal parameters and pitfalls of instituting the contracts and how state laws may prohibit them. The August feature also contains a list of steps to take to achieve legally compliant employment practices. Senior Associate Editor Al Slavin also offers his insights on the article via video available on www.bestreview.com.

The August issue also contains Best’s Review’s special Captive Domiciles and Services Issues & Answers section featuring interviews with Joel Chansky of Milliman and Brian First of SPARTA Insurance Holdings Inc.

Both interviews can be downloaded at www.bestreview.com/captives09.html.

August’s Other Highlights:

“Sea Change” explains how tight capital and volatile equity markets will influence the negotiations at Les Rendez-Vous de Septembre.
“Benefit Performance” answers the question: have variable annuities’ lifetime withdrawal guarantees become too expensive for insurers?
It’s finally here, insurers are using mobile devices for marketing and advertising— check out how in “On the Go.”

To read these articles and more, subscribe to Best's Review by visiting: www.bestreview.com, calling the A.M. Best customer service department at (908) 439-2200, ext. 5742, or e-mailing your request to customer_service@ambest.com.

Crawford & Company has launched a new Command Center designed to further improve service to clients by providing up-to-the-minute information on claims status and key performance indicators that are critical measures of the success of a claims management program.
The Crawford Command Center, which initially will be used by the Company's U.S. Property & Casualty segment, is located in Crawford's Atlanta headquarters. Its centerpiece is the Performance Dashboard, a joint development of Crawford's Information and Communications Technology (ICT) department and U.S. Property & Casualty. The dashboard provides real-time data and analytics to track claims and identify claims handling trends and issues.
The Performance Dashboard provides an in-depth, real-time view of all open inventory in CMS2, a recently introduced and enhanced claims management system, on a nationwide basis and by client, region and product line.
It displays a graphical representation of claim data for six key performance indicators: acknowledgement, first contact, first report, first inspection, status and closing report. Analysts working in the Command Center monitor the dashboard and review data, identify trends and develop initiatives to continually improve service to clients.

WESTERN NEWS ZONE......

2009-08-03T20:41:00.000-07:00

California Insurance Commissioner Steve Poizner issued the following statement Monday regarding the release of the latest draft Pay-as-You-Drive regulations:

"Pay as You Drive is a cutting-edge program that will create financial incentives for California motorists to drive less, leading to lower-cost auto insurance, less air pollution and a reduced dependence on foreign oil. After releasing the last draft of the Pay-As-You-Drive regulations, we received dozens of comments from consumer groups, the insurance industry and other interested parties. After careful consideration of these comments, I have issued revised regulations that will continue to protect the privacy of California drivers while paving the way for insurance companies to offer innovative Pay as You Drive and 'price per mile 'insurance."

The revised regulations can be found by selecting this link.

The pay-as-you-drive program will enable insurers to offer a new option for consumers who prefer pay-as-you-drive insurance. Companies can continue to offer traditional insurance based on estimated mileage. However, now they can also offer a verified mileage program instead of or in addition to a traditional estimated mileage program.

Commissioner Poizner originally proposed the "pay as you drive" regulations last summer to make a new, more mileage-accurate auto insurance option available for California consumers. The regulations were last revised in June 2009. Pay-as-you-drive insurance is a way for motorists to pay more accurately for the coverage they need by linking their premium more closely to the number of miles they actually drive. In addition, the regulations allow insurers to offer programs for consumers to pay for their insurance on a "price per mile" basis.

The revised regulations also allow insurers to offer discounts to drivers who opt to purchase a mileage verification policy. Any auto insurance program, including a pay-as-you-drive program, must be approved by Commissioner Poizner before being placed on the market for consumers to purchase.

If a driver elects to purchase a pay-as-you-drive policy, the insurer would verify the driver's miles through a variety of methods, including odometer readings taken by the insurer or its agents or vendors, auto repair dealers, smog check stations, self-reporting by the policyholder or a technological device placed in the consumer's vehicle. The amended regulations explicitly prohibit insurers from gathering location data from consumers for automobile rating purposes through the addition of a technological device. The regulations would not affect existing multipurpose devices such as GM's Onstar system or the use of a technological device as part of an emergency roadside assistance program.

In addition to the clear benefits of increasing options for consumers, especially options that allow consumers to save money by only paying for the insurance they use, pay-as-you-drive coverage has been touted by environmental groups as a way to help the environment. Last August, the Environmental Defense Fund estimated that if 30% of Californians participate in this voluntary coverage, California could avoid 55 million tons of CO2 emissions between 2009 and 2020, which is the equivalent of taking 10 million cars off the road. This would save 5.5 billion gallons of gasoline and save Californians $40 billion dollars in car-related expenses. Additionally, the California Air Resources Board has recommended the adoption of pay-as-you-drive as one of the means to meet future climate change gas reduction targets.

California law has procedures in place to allow for public involvement in adopting new regulations, including public comment on the revised regulation. After these procedures are completed, the regulations will take effect as soon as possible. Insurers will then be able to apply to offer pay-as-you-drive insurance in California. The regulations are anticipated to take effect in fall 2009.

MIDWEST NEWS ZONE......

2009-07-31T09:13:00.000-07:00

Medical payments per workers’ compensation claim in Michigan were among the lowest of 14 states, largely the result of lower utilization and lower prices paid for some services, according to a new study from the Workers Compensation Research Institute (WCRI).

The study, CompScope^TM Medical Benchmarks for Michigan, 9th Edition, reported that medical costs per claim in Michigan increased 6 percent in 2006 for claims at an average 12 months of experience—similar to the increase for the median study state, but at a slower pace compared to the previous five years.

The Cambridge, Mass.-based WCRI observed that medical payments per claim in Michigan were 23 percent lower than the 14-state median. The lower-than-typical medical cost per claim raises the question of what that means for injured workers, such as whether they had problems accessing the care they desired and how satisfied they were with the care they received.

Comparing Outcomes for Injured Workers in Michigan, a new WCRI study, examined these and other questions and found that Michigan injured workers reported outcomes in the middle of the range on nearly all measures, compared with worker responses in 10 other states. For example, Michigan workers had fewer problems accessing desired medical care. Their satisfaction with the overall medical care and the rate and speed of return to work were in the middle.

The study found that Michigan had a combination of lower prices paid and lower utilization for some services. Payments per claim were lower for physicians and for hospital inpatient episodes compared to the typical study state, but were closer to typical for providers of physical medicine services (chiropractors and physical/occupational therapists) and for hospital outpatient services.

For example, payments per claim to physicians were 21 percent lower in Michigan than in the typical study state. The main reason was that the services provided by Michigan physicians were less resource intensive, that is, physicians billed less often for the most complex new and established patient office visits.

But neither the utilization nor the prices paid were consistently lower across all service types, according to the study.

For example, prices paid to non-hospital providers were lower than typical for surgery and radiology, but were slightly higher than what was paid in the median state for evaluation and management and physical medicine services. These differences are aligned with Michigan’s fee schedule, observed WCRI.

Utilization (number of visits and services per visit) was somewhat lower than typical in Michigan for evaluation and management, major radiology (MRIs and CT scans), and surgery, but higher than typical only for physical medicine services.

In addition, fewer claims in Michigan involved some specialty services, such as major radiology, physical medicine, and supplies and equipment, although the surgery rate was typical.

The share of claims with chiropractic care was lower in Michigan than typical and decreasing over the study period—raising possible questions about worker access to such care.

The study also found that average payment per hospital inpatient episode was among the lowest of the study states, although the share of claims with inpatient care was like the median study state. Hospital outpatient payments per service were consistently lower than in the median state across all service categories, while fewer services per claim were provided for clinic evaluation and management and relatively more services for outpatient laboratory and physical medicine.

A key reason for the recent growth in medical payments per claim in Michigan was the higher payments per claim to hospital providers; payments to non-hospital providers were generally stable.

According to the study, overall payments for hospital outpatient services increased an average of nearly 9 percent per year from 2004 to 2006, and grew for all important outpatient services. By contrast, prices paid for non-hospital services were mostly stable in 2006 (consistent with no fee schedule changes).

Overall nonhospital utilization changed little from 2005 to 2006, but decreases were observed for some services—3 percent for physical medicine and 4 to 5 percent for radiology.

To order this report, go to the WCRI Web site: www.wcrinet.org.

The Risk and Insurance Management Society (RIMS) is disappointed with the decision taken by the Illinois Attorney General and the Illinois Department of Insurance to allow Arthur J. Gallagher & Co. to begin accepting contingent commissions.
RIMS has consistently stated that contingent commissions should be broadly prohibited as they represent an inherent conflict of interest. The investigations, admissions and fines that culminated in the agreement signed by some brokers in 2005 prove that these practices can be, and were, manipulated to the detriment of the insurance consumer.
“RIMS is concerned that Arthur J. Gallagher & Co., who signed the agreement in 2005, is now permitted to participate in this compensation practice,” says Terry Fleming, RIMS vice president and director of the division of risk management at Montgomery County, Maryland. “However, we hope that full disclosure of all forms of compensation will be provided to the insurance buyer in a timely manner. This will allow the consumer to determine whether the broker is acting in their best interest, before binding the contract.”
The decision to lift the ban on contingent commissions comes without any concurrent proposal by the Illinois Department of Insurance and Attorney General to regulate producer disclosure.
According to Fleming, RIMS has great reservations about lifting the ban on contingent commissions without strong protections for consumers. RIMS strongly urges Arthur J. Gallagher & Co. to continue to use the compensation disclosure requirements that were part of the 2005 agreement. Historically, RIMS has argued that, in the absence of a ban on contingent commissions, all forms of compensation—direct and indirect—should be fully disclosed to the consumer. This is a crucial component to the relationship between producer and consumer. RIMS remains troubled that the insurance industry promotes compensation practices that can lead to conflicts of interest. The Society hopes for a continued open dialogue between all parties on issues of producer compensation and disclosure.

WESTERN NEWS ZONE......

2009-07-30T18:59:00.000-07:00

Ventura County District Attorney Gregory Totten announced that Rodolfo Donjuan (DOB 1/17/1984) of Camarillo pleaded guilty to one count of felony auto insurance fraud. This case was investigated by the California Department of Insurance Fraud Division.

Donjuan contacted the Ventura County Sheriff's Department on July 18, 2008, and reported his 2000 Chevrolet Silverado had been stolen from a friend's house in Camarillo . The Silverado was subsequently located abandoned and wrecked a short distance away. Donjuan also filed a claim with his insurance carrier, Infinity Insurance.

During the next two months, Donjuan reportedly gave Infinity Insurance conflicting statements about the theft of his vehicle. His insurance claim was transferred to Infinity's Special Investigations Unit. On Sept. 24, 2008, Donjuan was deposed under oath by an Infinity Insurance attorney.

During the deposition, Donjuan was confronted with his inconsistent statements and reportedly admitted that he had lied. Donjuan stated he had been drinking beer and was driving when he crashed his vehicle. Donjuan said he ran away from the scene because he was afraid.

Donjuan is currently in custody at the Ventura County jail. His bail is set at $20,000. Donjuan will be sentenced on Aug. 25, and faces a maximum penalty of five years in state prison and a fine of up to $50,000.

NATIONAL NEWS ZONE......

2009-07-30T18:55:00.000-07:00

With federal stimulus money paving the way for new highway construction nationwide, and more people driving versus flying during the summer vacation season, highway workers face increasing danger.

To mitigate highway worker safety exposures, Zurich in North America and The Associated General Contractors of America (AGC) have developed a new educational campaign to increase awareness of dangers while helping to reduce highway worker injuries and fatal accidents.

“This program is designed for all individuals involved in highway, street and road construction, utility installation, roadway maintenance and landscaping," said Forrest Ropp, Zurich's senior risk engineering consultant and project leader.

Ropp said the Highway Worker Safety Program is customizable program consisting of eight interactive modules that address areas such as traffic control, asphalt paving, bridge work, concrete paving, demolition work, earthwork and grading operations, short-term and mobile operations and utility and drainage work. The modules can be presented individually or in any combination depending on the need and availability of personnel.

Ropp said the program focuses on the leading causes of highway worker fatalities and serious soft tissue injuries and contains a hierarchy of safety controls, more than 80 minutes of video, trainer and trainee presentation materials, resource guides and module quizzes. The presentation package includes one Interactive DVD and one DVD-ROM with editable PowerPoint Presentation, one printed version of the Instructor's guide, and five printed versions of the Participant's Manual.

Similar programs developed by Zurich North America and The Association of General Contractors of America (Soft Tissue Injury Prevention Program – STIPP) have reportedly helped reduced the number of work related injuries as evidenced by a decrease in soft tissue injury claims.

Specifically, in the first six months of implementing an awareness STIPP, proactive customers reported decreases of 30-45 percent in strain, sprain, and lower back type injuries.

Zurich and the AGC said a similar impact from the Highway Workers Safety Program for the construction industry would be a tremendous result.

EASTERN NEWS ZONE......

2009-07-30T18:52:00.000-07:00

Arthur J. Gallagher & Co. has acquired the Portland, Maine and Cranston, Rhode Island operations from Gresham & Associates Inc. headquartered in Atlanta.

The two New England offices are managing general agencies and wholesale insurance brokers providing insurance products for independent agents and brokers throughout the Northeastern United States.

The offices will operate as Risk Placement Services-Portland and Risk Placement Services-Cranston, and their associates will continue under the direction of Joel Cavaness, president of Risk Placement Services Inc., a subsidiary of Arthur J. Gallagher & Co.

INTERNATIONAL NEWS ZONE......

2009-07-30T18:41:00.000-07:00

Stating that Rep. Richard Neal’s (D-MA) bill to raise taxes on foreign-based insurance companies operating within the United States was anti-consumer and anti-competitive, the Coalition for Competitive Insurance Rates (CCIR) today voiced its strong opposition to the bill.

CCIR contends that the bill would drive up consumer insurance rates by reducing competition and critical US insurance capacity. When Neal introduced similar legislation in the 110th Congress, consumer organizations and businesses that rely on affordable insurance coverage joined in opposing passage.

"We urge members of Congress to reject this legislation, as they have twice before,” said Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers, a CCIR member. “Only a handful of very large, very profitable U.S. insurance companies would benefit from this bill. In contrast, the economic data make clear that American consumers and businesses would pay a steep price if Representative Neal’s proposal becomes law. This legislation represents a punitive and unnecessary tax aimed at benefiting some competitors at the expense of others."

A recent study by the Brattle Group, an economic consulting firm based in Cambridge, Mass., found that the proposed legislation would cost consumers more than $10 billion per year and would reduce U.S. reinsurance capacity by 20 percent. These negative effects would reportedly be felt most significantly in disaster-prone states like Florida, Louisiana and California. Insurers and consumers in these areas say that the Neal bill puts their states at risk. The Brattle Group study was co-authored by Temple University and Wharton School’s Dr. David Cummins.

Rep. Neal’s bill would reportedly significantly increase taxes on all foreign insurers who have U.S. subsidiaries and who provide vital insurance and reinsurance coverage to Americans. Because insurance is indisputably a global marketplace, the U.S. insurance market depends heavily on a worldwide network of foreign and domestic reinsurance companies in order to meet the country’s insurance capital needs. This is best illustrated by the fact that approximately two-thirds of all reinsurance required to protect US consumers and businesses against natural disasters is provided for by non-U.S. reinsurance companies.

“Consumers benefit from a competitive insurance marketplace. Coastal areas such as South Carolina’s are dependent on a maximum capacity of reinsurance. We believe this bill will restrict the market and ultimately raise prices for South Carolina citizens. Recent studies have shown that the results of this legislation could cost South Carolina residents more than $40 million a year. In addition, it would dislocate the market and create distinct advantages for some carriers over others, and that is not in the best interest of consumers,” said South Carolina Director of Insurance Scott Richardson who has previously written in opposition to the legislative proposal.

“The United States overall, and Florida specifically, requires a large amount of catastrophe reinsurance capacity, a substantial part of which is supplied by non-U.S. reinsurance companies,” said Dale Hammond, president and CEO of Homewise Insurance in Tampa, Florida. “Driving out competition would increase the upward pressure on insurance rates in Florida and throughout the U.S. – at exactly the wrong time.”

Earlier this year, the Senate Finance Committee received nearly 40 individual opposition letters in response to a staff draft of legislation similar to the Neal bill. Numerous organizations and individuals, including state insurance regulators, consumer groups, state legislators, trade policy experts, European governments and business owners expressed their strong opposition to the proposal.

“The international insurance market is an essential component of our ability to provide protection to homeowners and businesses,” said Bill Newton, executive director of the Florida Consumer Action Network. “We believe this tax increase proposal would in all likelihood have adverse consequences for consumers. Given today’s financial and economic conditions now is certainly not the time to make access to insurance more costly.”

“Legislation that encumbers the free market movement and the transfer of risk that are vital to a sound global insurance and reinsurance community will adversely affect America’s commercial insurance purchasers,” said Joseph Restoule, president of the Risk & Insurance Management Society (RIMS). RIMS is an association representing local government and business officials responsible for buying insurance for their organizations. “A free and fair marketplace enables the insured and insurers to seek innovative and affordable alternatives to manage risk. This legislation would drive up the cost of insurance for America’s commercial insurance consumers by reducing competition.”

Opponents of the bill say that this legislation is especially unnecessary because foreign-based insurers are already subject to a U.S. insurance excise tax and their U.S. subsidiaries pay U.S. income taxes.

“Rep. Neal’s bill is a protectionist measure that will hurt American consumers. It’s likely to send insurance rates soaring for the very consumers who can least afford big rate increases right now,” said Eli Lehrer, a senior fellow with the Competitive Enterprise Institute.

The Coalition for Competitive Insurance Rates has submitted three letters to Congress in recent years in opposition to such reinsurance tax proposals.

SOUTHWESTERN NEWS ZONE......

2009-07-29T16:01:00.000-07:00

Texas Mutual Insurance Company has begun distributing $75 million in workers’ compensation dividends. Approximately 38,000 business owners, representing 79 percent of the company’s policyholders, will receive a dividend as a reward for committing to workplace safety.

The amount of each qualifying policyholder’s dividend check is based largely on its premium size and loss ratio. Policyholders who prevent workplace accidents and control claim costs improve their chances of earning a dividend.

This year’s dividend announcement comes as the economy continues to suffer the worst slump since the Great Depression. Texas Mutual President Russ Oliver said that the company’s 11th consecutive dividend payout is a sign of its financial stability.

“We are not immune to the volatility in the markets,” stressed Oliver, “but we had a strong year in 2008. We wrote a record $768 million in premiums and, most importantly, retained 82 percent of our loyal customers. These dividends show that our policyholders are embracing our initiatives to prevent accidents and control costs.”

One of those initiatives is Texas Mutual’s workers’ compensation health care network. The company launched the network in 2006 to help injured workers get quality medical care, recover and return to productive employment.

The second annual network report card issued by the Texas Department of Insurance in October 2008 showed that medical costs on Texas Mutual’s in-network claims are 6 percent lower than non-network claims. Patients treated in the network return to work an average of 24 percent sooner than non-network patients.

WESTERN NEWS ZONE......

2009-07-29T15:46:00.000-07:00

California Insurance Commissioner Steve Poizner announced that Ian Max Henriquez, 42, of Los Angeles, was convicted of felony theft from an elder on July 21.

Henriquez, a former life insurance agent, was sentenced to two years in state prison and ordered to pay $100,000 in restitution, in addition to court fines and penalties.

According to California Department of Insurance Investigators, in January 2008, Henriquez illegally completed life insurance company surrender documents, forging the signature of his 83-year-old client in order to obtain $100,000 from the client's life annuity policy. When the victim had stopped receiving her annuity policy statements, she notified her son-in-law. Her son-in-law contacted the insurance company, which informed him that the mailing address for his mother-in-law had been changed and that a $100,000 check had been issued in her name against her annuity policy. Her son-in-law drove to the new mailing address and discovered that it was Henriquez's residence. He filed a complaint with CDI, and the Department immediately launched an investigation.

During the course of the investigation, Henriquez admitted to CDI investigators that he forged the victim's signature, changed her mailing address to his address and deposited her money into a business account for his personal use.

MIDWEST NEWS ZONE......

2009-07-29T15:42:00.000-07:00

After noticing reoccurring suspicious claims activity with a large retail operation customer, Zurich in North America’s Claims and Special Investigations Units sprung into action, busting a “slip and fall” fraud ring.

The work of Zurich’s Claims and special investigators helped federal postal inspectors unravel a scheme involving 33 individuals in Illinois and Wisconsin, who filed at least 60 claims with 16 insurance companies, including Zurich.

“We believe this scheme began in August 2005 and was still active until February 2009,” said Brian Wilson, vice president of Zurich’s Special Investigative Unit. “Shutting down these fraud rings sends a clear signal that we are watching for fraudulent activity, and ultimately benefits our customers in the end by keeping their premiums lower.”

The group struck “big box” retailers, sometimes as frequently as two and three times a day. The scheme involved staging slip and fall accidents in a store. One individual set up the accident with liquid or paper on the floor, while another staged the fall. Others acted as look-outs, making sure no store management witnessed the “accident,” and then informed store officials of the incident.

Claims were filed under the retailers’ medical payment portion of their policy, meaning checks were typically mailed directly to the claimant. Each claim was in the $4,000-$8,000 range.

While the vast majority of insurance claims are honest and legitimate, the Coalition Against Insurance Fraud statistics show 10-15 percent of all claims contain some element of fraud.

Ohio Department of Insurance Director Mary Jo Hudson announced that an earlier Cease and Desist order issued against The Beema Insurance Company of Pakistan has been made permanent.

A Department investigation revealed that The Beema Insurance Company did not have a license to sell insurance products in Ohio. Beema had allegedly underwritten health insurance policies facilitated by Association of Franchise and Independent Distributors (AFID) of Springfield, Ohio. The original Cease and Desist Order was issued in early June 2009.

AFID has already had a Cease and Desist Order filed against them by the Ohio Department of Insurance, who has referred the matter to Ohio Attorney General Richard Cordray for further investigation.
The North Carolina Department of Insurance has already issued a cease and desist order against both entities as well.

NATIONAL NEWS ZONE......

2009-07-29T15:37:00.000-07:00

One's age may determine how much insurance companies spend trying to get them onboard. New research from Mintel Comperemedia, a service that provides direct marketing competitive intelligence, shows health and life insurers pay much more attention to Baby Boomers than they do to Generation X and Generation Y.

In the 12 months ending June 2009, Gen Xers received 15% fewer health insurance marketing direct mail pieces than Boomers. Gen Y saw even fewer offers: 25% less than their parents’ generation. For life insurance, the younger generations are equally ignored: Gen X and Gen Y got 18% and 23% fewer mailings, respectively, than Baby Boomers did in the past year.

“Health and life insurers seem to favor marketing to older adults, but in doing so they’re missing vast market opportunities. All generations can benefit from health and life insurance coverage, so age shouldn’t dictate insurers’ direct marketing strategy,” states Daniel Hayes, vice president of insurance services at Mintel Comperemedia.

Recent consumer data from Mintel shows Generation X is very interested in health and life insurance, despite getting less direct mail. Gen Xers are less likely than average to say they own non-employer based life or health insurance, but they’re more likely to say they’ll purchase these products in the near future (17% more likely for health insurance, 23% for life insurance).

Furthermore, 63% of Gen X adults told Mintel “it is important to be well-insured when it comes to life insurance”, versus just 58% of the general population agreeing with that same statement.

“Generation X is under-served and over-interested in life and health insurance, making them the perfect target market,” commented Hayes. “Because Gen Xers are concerned about providing for both young children and aging parents, adequate insurance coverage is extremely important. They want to keep themselves and their dependants healthy, but they also need to know their families will be provided for if they aren’t around.”

Mintel says Gen Xers are 72% more likely than the average American to say they’re currently saving for a child’s education. But at the same time, they’re preparing to support their parents: 53% of Gen Xers say they expect to be the primary caregiver for a parent or other relative.

WESTERN NEWS ZONE......

2009-07-28T14:26:00.000-07:00

California Insurance Commissioner Poizner announced Tuesday that recently compiled Department of Insurance statistics show that scam artists may be committing more automobile insurance fraud to cash in on insurance money. The Department of Insurance has seen an increase in suspected auto arson and auto theft fraud referrals last year.

CDI saw an alarming 25 percent increase in suspected vehicle arson fraud cases in 2008 as compared with referred cases in 2007. (In 2007, CDI received 344 referrals for suspected automobile arson; in 2008, CDI received 451 referrals for suspected automobile arson.) Overall, the Department received almost 300 additional suspected vehicle theft and vehicle arson cases statewide in 2008 than in 2007. CDI received approximately 200 more suspected vehicle theft fraud case referrals in 2008 than in 2007.

In May, Poizner announced that a San Diego husband and wife and two additional individuals were charged with felony insurance fraud for conspiring abandon a 2004 Honda Accord to collect insurance money.

In March, an El Cajon man was arrested and charged with insurance fraud after he allegedly falsely reported that his vehicle was stolen.

EASTERN NEWS ZONE......

2009-07-28T10:04:00.000-07:00

An Ulster County, New York man who admitted that he illegally accepted workers' compensation benefits was ordered to make $77,800 in restitution and serve a 30-day jail sentence.

Judge Frank Milano sentenced Joseph A. Gambino, 58, of Saugerties, after accepting his guilty plea to charges of insurance fraud and workers' comp fraud. He was also sentenced to serve five years' probation.

Gambino was arrested Dec. 3 following an investigation by Joseph Kochetta of the New York State Insurance Department's Frauds Bureau, the New York State Insurance Fund and the Workers' Compensation Board Inspector General's Office.

Investigators reportedly videotaped Gambino engaged in such activities as moving furniture and riding a motorcycle without the cane he appeared to lean on heavily during medical exams. He had collected workers' comp benefits from the Insurance Fund for more than three years after claiming he had suffered a job-related back injury in 2003.

New Jersey Attorney General Anne Milgram and Criminal Justice Director Deborah Gramiccioni announced that a Passaic County man pleaded guilty to charges that he fraudulently used his father’s insurance plan to obtain prescription pain medications.
According to Acting Insurance Fraud Prosecutor Riza Dagli, David Van Dunk, Jr., 35, of Hewitt, pleaded guilty in Passaic County to third-degree theft by deception. The charges were contained in an Oct. 7, 2008 Passaic County grand jury indictment.
The state will recommend that Van Dunk be sentenced to three years of probation conditioned on him either serving 364 days in the county jail or successfully completing a drug treatment program of at least 18 months.
In pleading guilty, Van Dunk admitted that between Jan. 24 and Nov. 8, 2006, he falsely used his father’s prescription plan to wrongfully obtain prescription medications, including oxycodone, Percocet, morphine sulfate, and Endocet. Van Dunk claimed that the medications were for his father when, in fact, they were for himself.
As a result of the fraud, Connecticut General Life Insurance Company paid various pharmacies a total of $12,140 for the prescription medications.

MIDWEST NEWS ZONE......

2009-07-28T09:55:00.000-07:00

The Main Street America Group announced that Grain Dealers Mutual Insurance Company, an Indiana-domiciled regional property-casualty insurance company, will become an affiliate of Main Street America.

The agreement, which has been approved by the boards of directors of both companies, is subject to regulatory approval from the State of Indiana Department of Insurance, which is projected for early fourth quarter 2009. Financial terms of the transaction were not disclosed.

“Our affiliation with Grain Dealers Mutual will complement our 86 years of successfully serving our ‘Main Street’ independent agent-customers and their customers (policyholders),” said Tom Van Berkel, chairman, president and chief executive officer of Main Street America. “It will help us achieve our long-term strategy of sustained profitable growth by spreading risk and increasing scale through geographic diversification.”

Van Berkel added, “Grain Dealers Mutual has a strong brand and serves a market niche that is similar to Main Street America’s. They are a good cultural fit for us.”

Grain Dealers Mutual, based in Indianapolis, Ind., is a 107-year-old multi-line carrier that currently provides coverage in nine states, with its largest volume of business in North Carolina, Oklahoma, Mississippi and Indiana. In 2008, Grain Dealers Mutual generated nearly $33 million in direct written premium. Its product mix is 65 percent commercial, 35 percent personal. The company’s predominant line of business is commercial multi-peril, followed by homeowners and private passenger auto.

With the affiliation, Main Street America will be entering some new states, as well as increasing its presence in several existing states.

Grain Dealers Mutual president and chief executive officer Don Malcom will continue to oversee the company’s daily operations out of its Indianapolis headquarters. Grain Dealers Mutual will also maintain its regional service office in Greensboro, N.C.

“We will be affiliating with a financially strong organization that is 100 percent committed to the independent agency system,” Malcom said. “This will greatly benefit our network of independent agents and our policyholders.”

Ohio Department of Insurance Director Mary Jo Hudson announced that the average rates for the state’s top 10 private passenger auto insurers increased 0.8 percent in 2008. The average rates for the state’s top 10 homeowners increased by 6.9 percent in 2008.

Ohio has the 13^th lowest auto insurance and 6^th lowest homeowners insurance average premiums in the country, according to the most recent figures from the National Association of Insurance Commissioners (NAIC).

Auto insurance rates were unchanged overall for State Farm, whereas the other top 10 writers implemented slight overall increases (0-3 percent). Homeowner insurers implemented larger overall rate increases than have been seen in the previous four years (-.5 to 13.1 percent).

Based on the rate activity thus far and industry data, Department analysts expect the 2009 rate activity to continue similarly as it did in 2008. For auto insurance, the average rates will likely increase slightly. For homeowners insurance, the average rates will likely increase.
Changes in auto insurance rates are associated with medical costs, weather-related claims, the number of cars on Ohio roads and repair costs, while changes in homeowners insurance rates can be attributed to building and material costs and weather-related claims.

WESTERN NEWS ZONE......

2009-07-27T13:36:00.000-07:00

A cease and desist order has been issued in Washington against Gary A.Wyche of Vancouver for reportedly selling insurance without a license.

Wyche surrendered his Washington state license on Sept. 28, 2006 in lieu of revocation for professional misconduct. The Insurance Division of the Oregon Department of Consumer and Business Services revoked his Oregon license on Sept. 19, 2005.

Wyche was arrested on April 20 this year for alleged forgery, money laundering, and acting as an insurance agent without a license.

According to the Insurance Commissioner’s investigation, Wyche continued to transact insurance business in Washington and Oregon by selling annuities and diverting the premium into his personal account. He’s currently out on bail pending trial. His business associate, Tera Gardner, also was issued an order revoking her license for reported professional misconduct on June 5.

Wyche primarily conducted his illegal activities in the Portland/Vancouver area.

Anyone who purchased an insurance product from Gary Wyche since Sept. 28, 2006 is encouraged to contact Ted Bader at the Insurance Commissioner’s office at (360) 725-7049.

MIDWEST NEWS ZONE......

2009-07-27T13:31:00.000-07:00

Missouri Insurance Director John Huff addressed more than 130 members of the Missouri Association of Insurance Agents (MAIA) last Friday, making a strong argument that states, rather than the federal government, should continue to regulate the insurance industry.

Huff held a Q&A Friday morning with MAIA Executive Vice President Larry Case at the group’s 2009 Leadership Conference at the Lake of the Ozarks. Case said MAIA strongly opposes federal regulation of insurance, which is being advocated by some in Congress and the insurance industry. Huff agreed that states have successfully regulated insurance for more than 150 years, and that system should continue.

“For a century and a half, states have been protecting consumers, ensuring fair competition and affordable products,” said Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). “The prospect of an optional federal charter will dilute consumer protections by allowing some companies to choose the weaker regulatory option.”

Case asked Huff about the availability and affordability of earthquake insurance in Missouri, especially in the New Madrid Seismic Zone. Huff says because there is some consumer confusion about this product and its availability, the department is currently surveying the 20 largest homeowners writers in Missouri to find out what earthquake coverage they offer, along with details of their products, such as rates and deductibles.

Huff also said the department is now processing producer licensing much more efficiently, thanks to the adoption of State-Based Systems, a Web-based licensing database. With SBS, agents can now get same-day credit for continuing education hours and get their licensing applications processed in one business day. These services typically took three to five days before the department began using the new technology earlier this year.

EASTERN NEWS ZONE......

2009-07-27T13:20:00.000-07:00

An Oneida County, New York man has been arrested for trying to get his insurance company to pay for $4,000 in living expenses at a bed and breakfast that turned out not to exist, the New York State Insurance Department reported.

State police arrested Matthew Darling, 36, of Camden, after an investigation by Tom Hurley of the Insurance Department's Frauds Bureau.

Darling is accused of submitting a fraudulent insurance claim to Kemper Insurance Company for expenses he said he incurred while his home was being repaired after smoke damage caused by a faulty furnace. The investigation revealed that a receipt for cash payments Darling submitted was phony, as was the bed and breakfast where he claimed to have stayed. He was never paid for the purported expenses.

Darling is charged with insurance fraud and falsifying business records. He could be sentenced to up to four years in prison if he is convicted. He was released pending a hearing.

A Winchester, Massachusetts construction and demolition company was arraigned and pled guilty in Charlestown District Court last week, in connection with failing to among other things pay the proper premium for its workers’ compensation insurance policy.
P & R Partners Construction Inc. (P & R) pled guilty to charges of Workers’ Compensation Fraud. In addition, the company’s owners and officers, Elienai Coelho, age 30, of Stoneham, and Rodrigo Silva, age 29, of Medford, admitted to sufficient facts for Failing to Pay Overtime and Failing to Provide True and Accurate Payroll Records. After the plea was entered, District Court Judge Mark Summerville ordered Coelho, Silva and P & R to pay over $54,000 in restitution to 51 former employees, $50,000 in restitution to the insurance company, and a $30,000 fine to the Commonwealth. Judge Summerville also placed Coelho and Silva on probation for a period of one year.
Investigators from the Attorney General’s Fair Labor Division and the Insurance Fraud Bureau of Massachusetts (IFB) reviewed the company’s payroll records and determined that P & R failed to pay the proper premium for its workers’ comp insurance policy.
The Workers’ Compensation Law requires Massachusetts employers to pay workers’ comp insurance for their employees.